Finance

Airbus CEO seeks to calm supplier nerves over output hike By Reuters

© Reuters. FILE PHOTO: The logo of Airbus is seen at the entrance of a building in Toulouse, France, March 11, 2021. REUTERS/Stephane Mahe/File Photo

By Tim Hepher

PARIS (Reuters) – The head of Europe’s Airbus urged suppliers to prepare industrially and financially for steep increases in jet output floated earlier on Thursday, and said the industry was returning towards pre-crisis trends for its most popular airplanes.

Airbus sees demand for single-aisle medium-haul jets like the A320neo as fundamentally strong, gradually resuming a trajectory seen before COVID-19 triggered production cuts.

“It is just there. The pent-up demand is very strong for those flights,” Chief Executive Guillaume Faury told Reuters in an interview

“That is why we are sharing (production scenarios) with them and we are asking them to be prepared, and they have the means to do that. There is a lot of liquidity in the market.”

Faury’s comments came as Airbus firmed up plans for increased output in 2021 and issued a mix of firm targets and provisional scenarios that could almost double single-aisle output by 2025, sending its shares sharply higher.

Investors hailed a bounce-back for an industry battered by the coronavirus crisis, but several suppliers have talked of a standoff with Airbus about who should pay for investments needed to get single-aisle output back to pre-crisis levels and beyond.

Faury said the unusually detailed output plan would reassure suppliers that everyone was sharing the same burden.

“The aim is to give the supply chain a clear understanding…and make sure that they have no doubt that what we are asking them to prepare is consistent with what we are asking other suppliers to prepare,” he said.

“I think we should not overestimate our level of confidence, but we should not also not underestimate the fact that after the crisis it is no longer a crisis,” he said.

Analysts say tough negotiations over the balance between upfront machinery investments and the promise of profits from future high volumes is common. But the discussion has intensified after the crisis hit finances of many suppliers.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


Most Related Links :
Business News Governmental News Finance News

Need Your Help Today. Your $1 can change life.

[charitable_donation_form campaign_id=57167]

Source link

Back to top button