Airbus Sets New Delivery Record, Meets Sales Goal for 2016

 - January 11, 2017, 10:07 AM
Airbus Commercial Aircraft president Fabrice Bregier (left) and COO for customers John Leahy take questions during the company's annual press briefing Wednesday. (Photo: Airbus)

On the day Airbus handed over the first A321 of a landmark 100-aircraft order for a mix of single-aisle and widebody aircraft to Iran Air, Airbus Commercial Aircraft president Fabrice Brégier revealed that the airframer delivered a record number of 688 aircraft during the year, including 111 in December alone, and expects the figure to top 700 in 2017. The figure, announced Wednesday, represents the 14th year-on-year increase in annual deliveries. Among the deliveries was Airbus’s 10,000th aircraft, an A350XWB for Singapore Airlines.

During 2016 Airbus received 731 net orders, ending the year with a backlog of 6,874 aircraft worth more than $1 trillion including 72 A320s ordered on December 30 by India’s GoAir but not revealed until January 11. “We are essentially sold out [on single-aisle aircraft] until 2021,” reported Airbus Commercial Aircraft COO for customers John Leahy. Although orders declined from 2015, and forecasts point to no improvement this year, Leahy noted that cycles naturally exist and that deliveries could continue to increase due to the size of the backlog until the order cycle picks up again. Airbus has maintained its market share lead over Boeing, claiming 53 percent overall.

It was a year that not only delivered what we expected, but surpassed our expectations on both deliveries and orders,” said Brégier. “The beginning of the year was challenging, to say the least. We had two new aircraft, the A320neo and A350, and the challenge was to ramp up production.”

Difficulties with cabin suppliers for the A350-900 slowed deliveries in the early part of the year, but they have improved enough to result in delivery of 49 of the airplanes in 2016. Airbus remains on track to achieve a production rate of 10 aircraft per month by the end of 2018. “I believe we have largely de-risked this program,” reported Brégier, who noted that the aircraft had achieved a 98.6 percent reliability rate after less than two years in service. “In about one year’s time we aim to be above 99 percent,” he added.

In the meantime, Airbus flew the first A350-1000 on November 24 last year, while the second aircraft took to the air on January 10, the day before the press conference. First deliveries to launch customer Qatar Airways remain on track for the first half of 2017. Airbus continues to study a further stretched A350-2000, but with reduced priority.

Of the 2016 deliveries the single-aisle A320 family accounted for 545. It delivered the first 17 aircraft from the Mobile, Alabama assembly line, plus others from the line at Tianjin in China. Plans call for a fourth assembly line at Hamburg to begin production this summer. By mid-2019 Airbus expects to raise monthly production from the current 50 aircraft to 60.

The A320 delivery figure included 68 A320neos, allowing that program to catch up from delays caused by earlier engine issues. The backlog for the A320neo now stands at more than 5,000 aircraft, yet demand for the A320ceo “remains extremely solid” according to Brégier. “The transition to the neo has been less sharp than we expected three or four years ago.”

Separately, Airbus delivered 66 A330s during 2016, including the first example of the regional version for Saudi Airlines. Demand for the aircraft has remained high with the help of the A330neo, first flight of which the company expects in the first half of this year. Delays in the Rolls-Royce engines caused mainly by the pressures of work on other engine programs have pushed the A330neo back slightly, but the airframer expects to meet launch customer TAP’s desire for service entry by the spring of 2018.

Despite huge successes elsewhere, Airbus recorded no net orders for the A380 in 2016, while it delivered 28. However, both Brégier and Leahy remain sanguine about the aircraft’s prospects in the long-term. “The 380’s day will come, you can be sure of that,” affirmed Leahy, who also reported a backlog of 112 aircraft. “The A380 market is getting softer, and we have campaigns ongoing.” He also noted that while air traffic continues to double every 15 years, airport expansion has not matched the resulting need for capacity, in turn implying the need for larger aircraft.

Brégier reported that Airbus is preparing to reduce production to one A380 per month, and is working hard to reduce fixed production costs. Airbus is also examining ways of improving operating economics, including the addition of around 50 more seats through optimizing the cabin layout but without affecting the overall passenger comfort seen as a major selling point for the aircraft and its operators. Still, the “time is not yet there for an A380neo. It needs a better market environment and a clear return on investment,” he conceded. However, Bregier insisted the A380’s brightest days are ahead. “We have a future for this aircraft,” he concluded.