Singapore Air Show

Airbus Business Has “Moved East” - Enders

 - February 15, 2012, 8:15 PM
Airbus CEO Tom Enders. Photo by David McIntosh.

Airbus CEO and EADS boss-in-waiting Tom Enders said at the show yesterday that the Asia Pacific accounted for half of Airbus’s order intake in 2011. Enders was delivering an exceptionally optimistic outlook for the region during the company’s opening Singapore Airshow press conference.

Of Airbus’s gross order-count of 1,608 aircraft last year, 802 came from Asia Pacific customers. Of course, the A320neo accounted for much of the success, as Airbus signed “landmark” deals with AirAsia, Indigo and Jetstar. All-told, Airbus has collected firm orders for 546 Neos, as well as 184 standard A320s. Enders pointed out that Airbus had collected 98 percent of all narrowbody orders in the region and had taken a 58 percent share of the widebody market as well.

Meanwhile, 32 percent of Airbus’s total deliveries last year–some 170 aircraft–went to Asia Pacific carriers. Including aircraft heading to airlines via lessors, the figure rises to 220 airplanes, or 41 percent of the European airframer’s deliveries for the year. In terms of its total backlog, Asia Pacific carriers accounted for 38 percent of the nearly 4,500 airplanes still to be delivered, Enders said. “Ladies and gentlemen, our business in not moving East, it has moved East already,” he declared.

As a result, financing has become increasingly vital in the region. “Indeed, we have seen increased appetite in recent years from financial institutions in China, Japan and a number of other Asian countries, including Singapore,” said Enders. “In fact, last year banks from the region participated in almost 20 percent of all financing of Airbus aircraft deliveries.” That, he said, meant that banks in the region could supplement financing by European institutions.

Enders also singled out Singapore-based BOC Aviation as an example of the region’s growing influence in the leasing business. “What is important is that all these institutions in Asia are not just working with airlines from this region, but on a global scale, complementing and competing with players from Europe and the U.S. This is good news for us and good news for the airlines, ensuring a more diverse and steady source of funding throughout the cycle.”

Enders then turned his attention to Airbus’s product line, starting with the A380. Having delivered 26 of the superjumbos last year, the company has started to find its stride in planning for rate increases. This year it expects to deliver 30 of the double-decker airplanes, despite what Enders acknowledged as a serious issue in the development of hairline cracks in the wings. “We made a mistake here and we’re repairing it as quickly as possible,” he assured journalists at the show. “It’s a problem we created ourselves, so we’ll fix it ourselves.”

Enders also said the company “is looking at increasing production again,” of the A330, this time from 10 to 11 in 2014. Now building nine of the airplanes each month, next Airbus plans to go to 10 a month in the second quarter of 2013.

The Airbus CEO also addressed delays to the A350XWB. “We have made no secret of the fact that the program is running a little slower than planned,” he said. “The good news is that the first sections arrived in Toulouse at the end of December. Assembly of the static airframe will begin next month, followed by the start of the final assembly of the first aircraft that will fly in June.”

Drukair, national carrier of the Kingdom of Bhutan, has agreed to buy an Airbus A319 fitted with Sharklet wingtips, which reduce fuel-burn. The carrier operates out of Paro Airport, located at an altitude of 7,000 feet and surrounded by high mountains, where only visual flight rule operations are possible. The A319, which is covered by a memorandum of understanding, will be the largest aircraft to ever operate out of the Bhutanese capital.