Airbus is aiming to deliver around 720 commercial aircraft this year, a target which CEO Guillaume Faury acknowledged will be challenging to reach as it marks a significant increase on the 611 aircraft the European airframer handed over to customers in 2021. “It is a difficult ramp-up. We need to earn our right to reach these 720 [deliveries] each month, each week, and maybe every single day,” Faury cautioned during a financial results call to discuss year-end numbers with analysts on Thursday. “It will not be easy, but we think we can reasonably do it,” he said.
The European aerospace group's guidance that it expects to make 720 commercial aircraft deliveries in 2022 represents a 20 percent increase on the 600-delivery target Airbus set for last year.
The Toulouse-based manufacturer released the buoyant delivery forecast after it reported a record net profit of €4.2 billion ($4.8 billion) for 2021, reversed from a €1.1 billion loss in 2020, driven by a rise in commercial aircraft deliveries, higher earnings in its helicopter and defense divisions, and cost containment. Adjusted operating profit of Airbus’s commercial aircraft activities increased to €3.6 billion, from €618 million in 2020, and accounted for the bulk of the group’s €4.9 billion adjusted EBIT. Revenues rose 4 percent to €52.1 billion, mainly reflecting a higher number of commercial aircraft deliveries.
“2021 was a year of transition, where our attention shifted from navigating the pandemic towards recovery and growth. Thanks to the resilience and efforts of our teams, customers, and suppliers, we delivered remarkable full-year results,” commented Faury. He said the company is progressing with previously announced plans to ramp up A320 family production rates from on average 40 per month last year to 65 per month by summer 2023.
“We are doing this in a very complex environment,” Faury noted, pointing to the difficulty of boosting production after being idle for a while due to Covid-19, the high prices and scarcity of raw materials, and difficulty with logistics around the world “at, by the way, incredibly high prices.”
The energy situation and finding the right skills in a number of places are also possible bottlenecks to delivering 720 aircraft this year. “At Airbus, we do not have too much of this human resources challenge this year but moving forward this will remain a point of attention,” Faury said. Last month, the company announced a recruitment plan of around 6,000 new hires worldwide across the entire group.
Faury reiterated that the company will decide by the middle of the year on A320 family production rates beyond 2023. The OEM last year indicated it was looking at possibly ramping up A320 family production to 70 jets a month by the first quarter of 2024 and 75 a month by 2025.
“Seventy to 75 is making sense,” Faury asserted while insisting the decision will rest on finding the “complex” balance between demand for new aircraft and the ability of the supply chain to support higher production rates. “We are having discussions [with suppliers] on rates and on costs at the same time, but the outcome of the result will be mainly on the ability of the supply chain to do that ramp-up,” he said. Demand for the moment is “very strong,” according to Faury, but Airbus also wants to ascertain the sustainability of that demand for new aircraft. “We do not want to ramp up at the peak and then immediately ramp down again.”