Airbus Mulls A380 Cut As A350 Nears Flight Tests

By Jens Flottau
Source: Aviation Week & Space Technology

Demand for the A350 has been growing, even for the -1000, the largest variant, which will not be available until 2017 and has not pleased some airlines. “The level of demand we have seen recently would make a very clear business case for an accelerated ramp-up of production,” Wilhelm argues. However, it would also entail taking on additional risk. Chief Operating Officer for Customers John Leahy has been lobbying internally for a steeper ramp-up, given demand levels for the -900 and -1000. But the A350 “remains a tough ride in terms of ramp-up of the other flight-test aircraft and production,” says Wilhelm, so any near-term decision to increase the output is unlikely.

Airbus could add another customer to the A350 backlog soon with Kuwait Airways, which appears close to ordering 10 A350-900s. But Wilhelm cautions that further orders at the Paris air show “might not be as exceptional as last time.” Two years ago, Airbus collected 667 firm orders for the then-new A320NEO family and surpassed 700 for all models combined.

Despite Airbus concerns about transitioning to the NEO, demand for A320-family aircraft with the current engines is “very healthy,” says Wilhelm, and there are fewer than 200 production slots left for them. According to Wilhelm, pricing pressure is coming from competitors' less expensive offerings rather than from customers. Airbus has been trying to keep A320-family production stable at 42 aircraft per month, and it will only look at increasing output around 2018, when the transition to the NEO has been completed.

EADS reported a 315% increase in order intake in the first quarter, mainly based on stronger Airbus sales. Earnings before interest and taxes rose by 46% to €741 million and net income almost doubled to €241 million. The group's negative cash flow was mainly due to inventory buildup in the A380 and A350 programs and the large capital expenditure as the A350 approaches the start of regular production. EADS expects the cash flow to be balanced again by the end of the year, although there will be no quick recovery.

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