Airbus announces profit & plans to build new aeroplane assembly line in Alabama

Airbus announced on Wednesday that its first-quarter profit more than tripled to 1.22 billion euros ($1.28 billion), owing to an increase in aircraft deliveries as airlines recover from the worst of the epidemic.

By 2025, the company intends to increase the production of its A320 family of planes, which compete with Boeing 737s, to 75 per month. To achieve that rate, Airbus, located in Toulouse, France, would construct a second final assembly line at its plant in Mobile, Alabama, according to CEO Guillaume Faury.

The increased A320 production builds on Airbus’ current aim of producing 65 A320s per month by the middle of 2023. Short- and medium-range planes are in high demand, and the company aims to capitalise on this. Boeing is also attempting to increase production of the 737 Max but only produces about 30 per month.

Airbus’ aggressive intentions should worry the European company’s rival, Chicago-based Boeing Co, according to Richard Aboulafia, an analyst at the consultant AeroDynamic Advisory.

“The single-aisle jet market is booming, and the A321neo is doing especially well,” Aboulafia added. “They just might get there,” he remarked, adding that Airbus’ goal is to acquire 70% of that market, leaving only 30% for Boeing.

While it continues to pursue aggressive production goals, Airbus has experienced a setback in the development of a new airliner, the A321 XLR.

Airbus now expects the jet to start flying passengers in early 2024, rather than late 2023, as previously stated. Airbus has had more trouble than expected in completing the European Aviation Safety Agency’s certification standards.

Demand for smaller, two-aisle “widebody” planes, which are typically used for long-haul international flights, is significantly greater than demand for larger, two-aisle “narrowbody” planes like the A320 and 737 families — a section of the travel market that has been slower to recover.

Some analysts doubt that Airbus’ supply chain will be able to meet its manufacturing targets. On a conference call with analysts, Airbus officials stated that suppliers have guaranteed the company that they can deliver the required parts.

However, Airbus stated that Russia’s invasion of Ukraine, as well as the subsequent restriction on Russian imports, has worsened the company’s supply-chain vulnerability. The company used Russian titanium in aviation parts prior to the sanctions.

Airbus shipped 142 airline jets in the first quarter, up from 125 a year ago. Revenue increased 15% year over year to 12 billion euros ($12.645 billion).

Despite growing risks due to the “complex geopolitical and economic environment,” the firm maintained its targets of delivering 720 planes this year and earning 5.5 billion euros ($5.8 billion) in adjusted earnings before taxes.

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