Airbus criticizes skeptical supplier Raytheon over jet output

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PARIS, Sept 23 (Reuters) – Europe’s Airbus ( AIR.PA ) clashed with U.S. giant Raytheon Technologies ( RTX.N ) on Friday over plans for a record jump in jet production, after the industry’s biggest contractor questioned know whether a mishandled supply chain could keep up.

The world’s largest planemaker said it was sticking to a two-pronged plan to increase production by 50% from current levels by 2025 – a goal that would help Airbus become the first civil planemaker to deliver 1,000 planes in a year.

Chief Executive Guillaume Faury said demand was likely to outstrip supply for the most-produced mid-range models where Airbus has an edge over U.S. rival Boeing ( BA.N ).

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But speaking at the company’s first full-scale investor event in four years, he acknowledged concerns from inflation to interest rates and said broad-body recovery was less certain.

“We’re in a period where things are accelerating; we have more crises to deal with,” Faury said.

He spoke of a possible share buyback as Airbus rebuilds cash depleted by what he called the “existential crisis” of COVID-19, but warned “we’re not there yet”.

Airbus shares drifted in and out of positive territory and by mid-afternoon were up 0.4%.

A setback outside China has seen demand for medium-haul A320neo and Boeing 737 MAX jets recover faster than expected. But Airbus’ plans to build 75 A320neo family planes a month by 2025, up from around 50 now, have met with some scepticism.

The head of Raytheon Technologies, which owns engine maker Pratt & Whitney, told a conference last week that Faury “may say rate 75, but we think rate 65 is possible” by 2025.

Faury called the comments “really unhelpful” and said the engine manufacturers were concerned about the timing, not the number. “They believe 75. I can be cited because I checked,” he told investors.

Raytheon had no immediate comment.

Reuters reported this week that Airbus had eased pressure on suppliers to commit to the 2025 deadline, leaving room for a slip to 2026, but sticking to the targets for now. The company has not said when in 2025 it can reach the 75 target. read more

The key, the providers say, is when targets can be hit consistently.

“We’ll see when we plan to hit rate 75, in (20)25 hopefully. I’m committed to (20)25. That’s probably something we’ll communicate more precisely at our full-year results,” Faury said Friday.


Airbus, meanwhile, gave the strongest hint yet that it plans to launch a larger version of its 110-to-130-seat A220 passenger jet, but gave no clues about the timing of the decision.

A stretched version of the light aircraft makes a lot of sense, “but we don’t want to be right too soon”, Faury said.

The A220 was developed with an eye on the bulk of the jet market, but Canada’s Bombardier struggled to keep up with the investment needed to displace Airbus and Boeing and sold its aerospace jewel to Airbus in 2018.

Airbus has had higher-than-expected costs on the loss-making program, but believes it can break even in the middle of the decade.

An A220-500 would begin the process of replacing the 150-seat-plus A320neo, Europe’s space cow and a key battleground in the transatlantic war for sales with Boeing.

Airbus has taken a commanding lead in the bulk of the single-aisle market, most recently through the larger A321neo, which chief financial officer Dominik Asam said will have an increasing share of sales.

Although Airbus was born as a maker of long-haul, wide-body aircraft with the A300, which took flight 50 years ago next month, by far its biggest commercial success has been in the workhorse single-aisle jets popularized by budget carriers.

Improvements in the biggest jets at once have eaten into the lower end of a market that for decades was reserved for wide-body jets such as Boeing’s 747, 777 and 787 or the Airbus A350.

Faury said Airbus aimed to increase competition with Boeing in the wide-body market, starting with the new A350 Freighter. Experts say Boeing dominates air freight and has so far outsold the A350 with its future 777X Freighter.

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Reporting by Tim Hepher; Editing by Edmund Blair and Mark Potter

Our standards: Thomson Reuters Trust Principles.

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