Airbus soars ahead of Boeing as record December pushes 2016 orders above target

Best end of year on record for European plane maker sees it move ahead of Boeing as its US arch rival announces lay-offs amid slowing sales through last year.

An Airbus A350 XWB performs during the opening of the Dubai Airshow. Airbus beat its own target for orders for last year, pushing it ahead of Boeing. Kamran Jebreili / AP
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Airbus is expecting a smoother flow of aircraft production in 2017, the plane maker’s chief executive said on Wednesday, after the company reported a record number of deliveries in December.

Airbus delivered a 111 aircraft last month, with the last-minute surge allowing it to beat its delivery target for 2016 after supply chain problems hampered the European aurcraft maker earlier in the year.

“Don’t go fast to the conclusion that this year we will maintain this delivery across 2017. We don’t intend to deliver 1,200 aircraft,” said Fabrice Brégier said.

“We will see for December 2017. But I hope we will not have to strike another record and that we will be a bit smoother during the year,” he said, adding that the first six months of 2016 had been unusually difficult from a production perspective.

Problems with engines for the A320neo were one of the issues during 2016. Mr Brégier said the Pratt & Whitney engines were now working well, but added: “That doesn’t mean they don’t need to be improved.”

On the wide-body A350 plane, which experienced delays due to cabin issues, he said he believed the programme was largely de-risked and that reliability should rise to above 99 per cent in one year.

Airbus is expecting to deliver more than 700 aircraft in 2017, its chief executive said on Wednesday.

“We will continue to ramp up. As of today, we will be above 700 deliveries,” Mr Brégier said when asked about expected deliveries for 2017, adding a more precise figure would be given when parent Airbus Group reports results on February 22.

Responding to concerns of slowing orders, the sales chief John Leahy said any order deferrals were manageable because the plane maker had a large backlog.

“Right now we are overbooked and if I don’t get some deferrals someone will be unhappy,” he said.

The 2016 results topped forecasts by a comfortable margin, and pushed Airbus ahead of its arch-rival Boeing in the race for new orders.

Airbus delivered 688 aircraft in 2016, compared with an official company forecast of more than 650 and an informal goal recently set by its finance director of more than 670.

That narrowed an output gap with the world’s biggest aircraft manufacturer, Boeing, but Airbus remained ahead in terms of new orders after posting 731 net orders for 2016.

Boeing delivered 748 aircraft and took 668 net orders in 2016.

On Tuesday it warned it will conduct involuntary lay-offs of engineers, part of an ongoing cost-cutting drive as the aerospace and defence company responds to increasing competition amid slowing aircraft sales.

The reductions, disclosed in an internal memo seen by Reuters, also include voluntary layoffs.

The memo did not indicate the number of reductions the company planned. It listed dozens of job categories eligible for voluntary lay-offs in Washington state, southern California and South Carolina.

“While we have made good progress, more changes are needed to ensure our long-term future,” John Hamilton, vice president of engineering at Boeing Commercial Airplanes, wrote in the memo.

“We continue to operate in an environment characterised by fewer sales opportunities and tough competition.”

Last month, Airbus officially booked a deal to sell 98 aircraft to IranAir and also posted an order for 72 A320neo aircraft from India’s Go Air.

It also booked an order for 90 A320 family jets from an undisclosed customer, expected to be from the Saudi carrier flynas, plus an order for 42 A320 family jets, expected to be from Shanghai-based Bank of Communications Financial Leasing.

* Agencies

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