Monday, September 14, 2015

Airbus expects boost in North American sales with new US factory

The fuselage of an American Airlines A321 which will be the second aircraft off the Mobile production line.
(Kurt Hofmann)

Airbus believes the opening of its first US-based factory will help it gain more narrowbody sales from North American carriers.
Briefing media ahead of today’s opening of the final assembly and delivery center in Mobile, Alabama, Airbus executives said they had seen “a very positive impact” among North American customers since the company announced in 2012 that it would add a US assembly factory to those it has in Toulouse, France; Hamburg, Germany; and Tianjin, China.

“I can tell you that we have had customers who have said that they want to announce that their aircraft will be built in Mobile. It’s a positive impact on the Airbus brand,” Airbus Americas president Barry Eccleston said.

Airbus Group Inc. chairman and CEO Allan McArtor added that, rather like the impact Japanese automobile companies saw when they put factories in the US, “we think we can expect to see a similar bounce.”

Airbus president and CEO Fabrice BrĂ©gier noted that the opening of the Mobile factory “doubles the number of manufacturers in the US” producing commercial airliners.

Eccleston said that while the North American market is a mature one, it remains, along with China, one of the world’s largest. Airbus’ single biggest airline customer is American Airlines, which will take the second aircraft to come off the Mobile assembly line – an A321. Other North American customers include Air Canada, Delta Air Lines, Frontier, Spirit, Hawaiian Airlines, JetBlue Airways, United Airlines and Virgin America as well as US lessors such as Aviation Capital Group and Air Leasing Corp.

Eccleston said that over the next 20 years, air traffic in North America was expected to increase by about 40% - at an average annual rate of 2.4% - with 90% of that growth on existing routes. “This means that US airlines mostly buy the larger [narrowbody] aircraft, the A321. When we launched Mobile, the plan was to open with the A320, but the first two to be produced there are A321s and all will be A321s this year. That’s where the market is going.”

Eccleston said there was a “huge replacement market” in the US. In total, Airbus forecasts a need for 5,880 new passenger and freighter aircraft in North America through 2034, comprising 4,730 narrowbodies, 1,000 widebodies and 150 very large aircraft.

Airbus first sold an airliner to a US customer in the late 1980s and now holds about 40% of the North American market, Eccleston said.

The Mobile factory will initially produce A320-family ceos, but transition to re-engined neos in late 2017 or early 2018. By the end of 2018 the plan is to be producing four aircraft a month. There are no plans to build widebodies at the US factory.

Eccleston told ATW that while several US airlines continue to seek a direct replacement for the Boeing 757 widebody, Airbus did not see the business case for developing an all-new aircraft. He said the long range version of the A321 fills most of the role performed by the 757, while the re-engined A330neo widebody further closes the gap.

“The 757 does two different jobs for the US carriers – [long haul] on the mainland and then the transatlantic and Hawaiian routes. The A321LR, in our opinion, satisfies about 94% of those routes. So the question is, to satisfy the handful of routes that need slightly longer range, should we develop a new airplane at some $12 billion? We see nothing like a business case for that. We see a very, very small market space left after you look at the A321LR plus the A330neo.”

Boeing has said that it is looking closely at the 757 market and whether there is a need to develop an aircraft between the 737MAX and the 787-8, but no commitment has been made.

(Karen Walker - ATWOnline News)

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