Airbus sets plan to gear up production in show of confidence

Airbus is preparing to ramp up output next year of its most important jet, the A320neo, in a sign of growing confidence on the part of the European planemaker that jetliner demand is poised to recover. While no decision has been made, suppliers have been told to be ready to support a monthly rate of 47 A320neo-family planes per in the second half of 2021, Airbus said in an emailed statement Thursday. The company slashed the target rate of its popular single-aisle workhorse by a third in April, when demand evaporated as the coronavirus crisis gutted travel demand. “We plan to maintain the rate 40 up till summer next year and we have asked the supply chain to protect up to rate 47 to be prepared for when the market recovers,” Airbus said. The optimistic assessment suggests that Airbus is comfortable enough with demand to bet on an increase despite recent capacity cuts and order deferrals by major customers. Analysts have been warning that the production outlook for the European manufacturer and US rival Boeing may not be sustainable. Airbus didn’t say exactly when it expected to gear up, and said it may still make minor adjustments. “We have done a re-evaluation of the situation after the summer period,” Airbus said. “We have refined the plan for the A320 family programs based on our current view of the market.” Airbus’ optimism is surprising given airlines’ recent gloom over near-term prospects, said Bloomberg Intelligence analyst George Ferguson. “One of the most successful airlines on the globe, Southwest, just told us they have 20% too many employees and too many airplanes,” Ferguson said. Airbus could be attempting to time the market’s recovery while ensuring suppliers are prepared to ramp up, he added.<br/>