Airbus confirms plans to raise A320 output to 63 a month

PARIS (Reuters) - Airbus AIR.PA plans to increase production of single-aisle A320-family aircraft to 63 a month, a company spokesman said.

FILE PHOTO: Flight test engineers drive the Airbus A320neo (New Engine Option) after its first flight in Colomiers near Toulouse, southwestern France, September 25, 2014. REUTERS/Regis Duvignau/File Photo

The production increase, first reported by France’s La Tribune, will take effect in 2019, accelerating previous plans to lift output to 60 aircraft a month by the same deadline.

The plans were unveiled to suppliers in a letter earlier this month, the spokesman said.

Airbus currently produces 55 A320-family aircraft a month, according to an industry source.

However, one of Airbus’s leading engine suppliers declined to endorse the new production plan publicly, saying it was too early to make such a commitment amid a switchover between engine models taking place as assembly lines run at record speeds.

"As of today, we are not in a position to commit ourselves to higher volumes," Safran SAF.PA CEO Philippe Petitcolin said.

“We understand the needs of our client and if we are able to respond favorably we will do so, but we don’t want to start discussions on a commitment beyond what was agreed 18 months ago, (before)...early 2019,” Petitcolin told reporters.

It was not immediately clear whether a higher Airbus target of 63 jets a month, which has been circulating for some time, had already been anticipated in those previous discussions.

Through their CFM joint-venture, Safran and GE GE.N are changing models to the LEAP engine, which has faced some delivery delays.

The engines power the latest version of Boeing 737 and about half of the A320neo line sold by Airbus.

Petitcolin said Safran was predicting 1,100 LEAP engine deliveries in 2018 - a number slightly shy of GE’s forecast - as a matter of caution, but did not exclude output touching 1,200.

Safran has previously adopted a conservative view on production increases as engine makers adapt to the new models and put increased demands on an already stressed supply chain.

Looking beyond 2019, Airbus is studying long-term plans to raise output of its best-selling jet to as high as 75 a month, said the industry source, who is familiar with the company’s planning.

Airbus Chief Executive Tom Enders has spoken of proposals to raise production to 70 a month over an undefined period, reflecting rising air travel and strong commercial jet demand.

In the United States, his counterpart at Boeing said on Wednesday it continues to see upward pressure on production rates of the 737, but held short of announcing a production hike.

Boeing is successfully coping with recent supply problems with 737 engines and fuselages and will make “disciplined” output decisions, CEO Dennis Muilenburg told analysts.

Boeing aims to reach production of 57 of the narrow-body jets per month in 2019.

Reporting by Tim Hepher; Editing by Bate Felix and Adrian Croft