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Airbus may shift more production toward popular A321 model

PHOENIX (Reuters) - Airbus AIR.PA may shift more of its narrrow-body jetliner production toward the largest member of the A320 family, sales chief John Leahy said on Monday, as the model outsells Boeing Co's rival aircraft.

People are silhouetted past a logo of the Airbus Group during the Airbus annual news conference in Colomiers, near Toulouse January 13, 2015.REUTERS/Regis Duvignau

The 185-seat A321neo has been winning more orders than the 178-seat Boeing MAX 9, putting pressure on the U.S. planemaker which is considering building a new plane to compete with the A321.

The A321 and its A321neo successor make up 34 percent of Airbus’ narrow-body order backlog, but the French-based planemaker’s production plans already call for 50 percent of the total to be in that size as airlines and leasing companies upgrade models to handle rising traffic.

Leahy said that proportion could increase even further.

“If you look at what is being produced now it is approaching 50 percent on A321,” Leahy told Reuters on the sidelines of the Istat Americas air finance conference.

“I have already gone back to our programme people and said we need the capability of going to 60 percent,” he added.

Aircraft manufacturers typically make larger profit margins on the larger models within a specific category.

Leasing companies, which make up about half of jetliner deliveries, frequently order smaller models and retain the flexibility to switch to larger ones before delivery.

Randy Tinseth, Boeing’s vice president of marketing, told Istat Americas conference that the heart of narrow-body jet demand remained in the slightly smaller 737 MAX 8 or A320 size.

The comments by the company executives reflect a duel over strategy in the market for narrow-body jets, which they estimate to be worth $2 trillion over 20 years.

Both planemakers defended their plans to increase production of the medium-haul jets despite worldwide economic jitters, saying they were supported by solid demand for air transport.

Reporting by Tim Hepher; Editing by Richard Chang

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