Airbus to halve A380 output

[andypspotter]

Airbus is to halve its production output on the Airbus A380, aiming for just 12 deliveries annually from 2018.

The airframer had achieved production breakeven on the double-deck type last year, when it delivered 27 aircraft.

But the backlog has diminished with few additional orders.

Airbus chief executive Fabrice Bregier describes the rate cut as a “prudent” and “proactive” measure.

“We are establishing a new target for our industrial planning,” he says, adding that Airbus is “keeping all [its] options open” for the emergence of future A380 demand.

He insist that the airframer will continue to invest in the jet, and adds: “The A380 is here to stay.”

The company believes that any effects on employment within the A380 line will be “mitigated” by other programme ramp-up efforts.

Airbus will aim to increase production efficiency to break even at an output of 20 aircraft next year, and to bring this threshold down further through additional cost reductions.

It has delivered 193 of the type to customers, out of an overall orderbook of 319, leaving a backlog of 126.

[andypspotter]

Airbus chief executive Fabrice Bregier expects the production rate cut on the A380 programme to last “a few years” but would not put a more specific figure on the period.

The airframer will slash output to just 12 aircraft annually from 2018, but Bregier is adamant that higher rates will return.

“I think if we do that we’ll be able to sustain the A380 at this low level for a few years before ramping up again,” he said, speaking during a briefing at the Farnborough air show.

While Airbus would have to carve away at heavy fixed costs to bring the production break-even threshold down to a level closer to the revised A380 rate, Bregier appears unconcerned about the financial impact.

The level of profitability – or loss – involved would “not be material” for Airbus at a rate of 12 aircraft per year, he says.

Bregier reiterates his claim that the traffic growth at congested airports will require the deployment of larger aircraft – a claim reflected in Airbus’s newly-issued 20-year forecast for the high-capacity sector.

But he also points out that current A380 operators, notably Emirates, will eventually need to consider replacing their aircraft.

Bregier says the airframer must work on demonstrating to airlines that the A380 attracts passengers, adding that Airbus is testing an Internet portal designed specifically to allow travellers to hunt for A380 services.

But he adds that the A380 situation is not the company’s primary obstacle. “The challenge is not the A380, the challenge is [ramping-up] the A320neo and A350,” he says.