Airbus to ramp up A350 production to ten aircraft/month in 2026

Airbus is speeding up the production rate of the A350. On the back of various successful and promising sales campaigns, the rate will go to ten aircraft per month in 2026 from the current six. The airframer said in February that the production would go up to nine A350s by the end of 2025, but this is by no means the definitive rate. CEO Guillaume Faury could not specify when exactly in 2026 the rate will go to ten. “We are at the end of 2023 and building the plan to get to rate ten. But it is indeed a continuation of the ramp-up of getting to rate nine at the end of 2025,” Faury replied to AirInsight. He recalled that the A350 was at only four aircraft per month during the pandemic, so the ramp-up shows how demand for long-haul widebodies continues to recover. “The ramp-up reflects orders, MoUs, and a certain share of what we call the open market with non-allocated deals for which there are existing campaigns. That reflects a fair share of the market moving forward. Of course, we include with a high level of likelihood deals for which we have significant progress, including the Air France-KLM MoU as well.” Air France-KLM intends to order 50 A350-900s and -1000s and take options on another 40. EVA Air said on Tuesday that it wants to order 18 A350-1000s. Ten -900s were in the October orders list from an undisclosed customer. The announcement on the A350 is the only rate increase that Airbus has shared in its Q3 earnings release. Carefully choosing the wording, Airbus says that the A220 is “continuing” towards rate 14 per month “in 2026”, which as Airbus stated earlier was the rate for “the middle of the decade.” For the A320neo family, the airframer says it is “progressing well” toward rate 75 per month for 2026. As Faury said in July, Airbus is no longer sharing interim targets. The A330 will go to four per month in 2024, which was already announced in February. 9M profit but also some charges Airbus reported a consolidated net profit of €2.332 billion for January-September, down nine percent from €2.568 in 2022. Revenues grew by twelve percent to €42.560 billion from €38.119 billion. EBIT Adjusted was up by four percent to €3.631 billion from €3.481 billion. This reflects higher deliveries and a more favorable hedge rate, partially offset by investments for preparing for the future. EBIT Reported was down by 24 percent to €2.712 billion from €3.552 billion. This includes €919 million in adjustments, of which €806 million from the dollar pre-delivery mismatch and balance sheet revaluation, €57 million related to the restructuring of the Aerostructures business unit, and €56 million in other costs. Consolidated free cash flow before mergers and acquisitions and customer financing was down by 64 percent to €1.034 billion from €2.899 billion. Airbus says this mainly reflects the inventory build-up in Q3, consistent with the backloaded delivery profile and production ramp-up. Q3 consolidated produced €14.897 billion in revenues, up from €13.309 billion. EBIT Adjusted was €1.013 billion versus €836 million, and EBIT Reported €825 million versus €973 million. The net result was €806 million, up from €667 million. Commercial Aircraft Commercial Aircraft reported 18 percent higher revenues for the 9M period to €31.507 billion from €26.654 billion. EBIT Reported was €2.306 billion versus €3.241 billion in the same period of 2022. EBIT Adjusted was up by 12 percent to €3.216 billion from €2.875 billion. In Q3, revenues improved to €11.158 billion from €9.121 billion, EBIT Reported to €783 million from €763 million, and EBIT Adjusted to €960 million from €599 million. In the first nine months, Airbus received net orders for 1.241 aircraft versus 647 in the same period of last year. The backlog stood at 7.992 aircraft by the end of September, up from 7.294 a year earlier. The OEM delivered 488 airliners through September, but this has jumped to 559 by the end of October. Around 720 deliveries are still the target Airbus reiterates its guidance of around 720 deliveries this year despite the supply chain remaining challenging. Meeting this target means that Airbus needs to deliver 161 aircraft in November and December. With 166 deliveries in the same two months last year, 161 should be possible. “We expect the supply chain to be challenging for a while as our needs for material and components continue to increase in line with our ongoing ramp-up, which continues to be paced by a few critical suppliers.” It’s not just engine makers Pratt & Whitney or CFM and Rolls-Royce that face issues of their own, but also suppliers of sub-components are still struggling to ramp up production. Speaking specifically about P&W and the GTF issue, Faury said: “We are working very closely with them to get the engines and optimize the in-service support in spite of the recall campaign that is having a lot of negative consequences and creating a lot of pain for our customers. I do not see changes for 2023. When it comes to 2024, we are not yet there. We will keep ramping up and obviously, that is something that we plan in very close coordination with P&W and CFM for the LEAP engine. (…) We take as few engines as we can for the ramp-up but also to support the active fleet.” Faury was not willing to specify what is being discussed between Airbus and Spirit AeroSystems. Spirit recently announced a revised contract with Boeing and said last week it is in discussions with Airbus to get more favorable terms and conditions. The Wichita-based company produces parts for the A220, A320neo family, A330, and A350, but has been in forward losses particularly on the A220 and A350 for some time. “We are supporting Spirit. We are working very closely with them. I don’t want to be specific, it’s up to Spirit to disclose what they want to disclose. We are less dependent on Spirit than our preferred competitor (Boeing), but they are providing very important shipsets to Airbus. But we also expect from Spirit to well support Airbus. After all, we are their customer.” Helicopters doing well Other business segments saw fluctuating results. 9M revenues for Helicopters were up by three percent to €4.662 billion, but down by six percent for Defense and Space to €7.133 billion. This was mainly driven by a backloaded A400M delivery profile and updated Estimates at Completion of certain satellite development programs. Space was affected by charges in the satellite business. EBIT Reported for Helicopters was up eight percent to €410 million. D&S reduced its negative EBIT Reported to €-3 million from €-64 million. It is the same with EBIT Adjusted, with Helicopters showing a ten percent improvement to €417 million and Defense and Space a €-1 million result versus €-261 million last year.

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