Domhnal Slattery, Chief Executive Officer of Avolon, speaks during an interview with Reuters on the opening day of the Singapore Airshow in Singapore, February 15, 2022. REUTERS/Caroline Chia
February 15, 2022
By Aradhana Aravindan
SINGAPORE (Reuters) -Airbus may not be able to raise its jet output as quickly as it hopes because of snags in the supply chain, the head of the world’s second-largest aircraft leasing company said on Tuesday.
Avolon CEO Domhnal Slattery told a forum at the Singapore Airshow that the plans “may not be as ambitious as (Airbus) had articulated to the market six or nine months ago.”
“It isn’t so much that the demand isn’t there. The demand is probably there. It is just the ability of the supply chain below the airframers to actually deliver,” he said.
“So my sense is the production rates that Airbus want to get to are probably 12-24 months behind where they would like to be.”
The European planemaker cut production of its benchmark A320 medium-haul jets by a third to 40 a month when the coronavirus pandemic severely reduced travel demand in 2020.
In May 2021 it said it would restore this to 64 a month by second-quarter 2023. It later rounded this up to 65 a month by summer 2023. It has also said it is looking at scenarios of 70 a month by the first quarter of 2024 and 75 a month by 2025.
An Airbus spokesman said on Tuesday, “We are on the trajectory towards rate 65 (a month) by summer 2023 and are assessing potential steps beyond together with our suppliers.”
Avolon is one of a number of leasing companies that are publicly or privately worried that Airbus is pushing production up too quickly. Suppliers including the French co-parent of engine maker CFM International have voiced concerns too.
The president of CFM International, Gael Mehuest, told the same event in Singapore on Tuesday that the supply chain is “under constraint right now”.
“We had to virtually stop all production and restart it. It is not something you do easily. It does create some difficulties and we are working on that,” he said. CFM is co-owned by France’s Safran and General Electric.
Airbus has said its production forecasts are underpinned by strong demand for its jets and a rebound in domestic flying.
Asked on Monday whether supply chain problems could hamper its output plans, Airbus Chief Commercial Officer Christian Scherer said, “we are doing everything we can for that not to be the case.”
(Reporting by Aradhana Aravindan; writing by Tim Hepher; editing by Jason Neely and Michael Urquhart)
Source: One America News Network
