July 26, 2017 / 7:37 AM / 3 months ago

Airbus A350 goals on track, but A320neo plans stretched

PARIS (Reuters) - Airbus said it was on track to meet a target of 10 A350 deliveries a month by the end of 2018 as it hit a milestone of 100 deliveries since Europe’s newest wide-body jet came into service, but doubts remained over its A320neo plans.

FILE PHOTO: An Airbus A350 aircraft flies in formation with Britain's Red Arrows flying display team at the Farnborough International Airshow in Farnborough, Britain July 15, 2016. REUTERS/Peter Nicholls/File Photo

Airbus Chief Operating Officer and President of Commercial Aircraft Fabrice Bregier reaffirmed the A350 target after delivering a A350-900 jetliner to China Airlines.

The European planemaker is juggling complex industrial and demand factors as it increases production of the A350 and the smaller A320neo family to regenerate its portfolio.

Qatar Airways last month canceled four A350s following delays though a person familiar with the matter said the two sides were in constructive discussions on the issue.

The carrier had earlier canceled several A320neo jets due to problems with engines developed by Pratt & Whitney. It has expressed interest in the larger A321neo, but this time powered by alternative engine supplier CFM.

Airbus executive Bregier has been in the Gulf state recently for talks, according to Qatar News Agency.

Pratt & Whitney parent United Technologies (UTX.N) on Tuesday reaffirmed its target for deliveries of its new Geared Turbofan engine for the A320neo.

Airbus is expected broadly to stick to its own delivery expectations when it reports earnings on Thursday.

Industry sources say it has opted for now to accept Pratt’s commitments and wait for more engines, but that it remains frustrated at the slow pace of recovery which puts pressure on the planemaker’s delivery plans for the rest of the year.

Airbus aims to deliver some 200 A320neo-family jets in 2017.

In a sign of the task ahead, industry sources say more than half of these were originally due to be Pratt & Whitney variants under the original confidential production plan for the year, since Pratt’s engine entered service before CFM’s model.

In the first half, Airbus delivered just 16 Pratt-powered A320neo jets, barely a third of the 43 powered by competing CFM engines, several sources said. That leaves more than 80 Pratt-powered jets to deliver in the remainder of the year.

Airbus declined comment.

Deliveries are said to be held up partly because airlines are holding out for more spare engines which Pratt is unable to deliver.

Speaking to Reuters on Tuesday, United Tech finance director Akhil Johri acknowledged pressure on the supply of spares.

“There’s always a trade-off between spares versus production engines...Ideally, if we had unlimited capacity we would satisfy both, but unfortunately that’s not the case,” he said.

CFM has indicated that it sees rising demand for its new LEAP engines but its production plans are seen unlikely to contain enough buffer to compensate for Pratt’s difficulties, at least in the short term.

It has also had some glitches with forgings and materials but is so far said to be just a few weeks behind schedule.

Additional reporting by Alexander Cornwell and Alwyn Scott; Editing by Edmund Blair/Keith Weir

Our Standards:The Thomson Reuters Trust Principles.
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