Airbus facing upfront costs to support jet output increase

Airbus is incurring up-front costs as it prepares for higher jet production and plans a breathing space to absorb them once it reaches its output goal, its finance chief said on Wednesday. Airbus is targeting a roughly 50% increase in production of its A320neo cash-cow to 75 planes a month by 2026. But to lay the groundwork it has had to invest in thousands of new workers and is building two new assembly lines. "We want to pre-hire to be ready to achieve rate-75 in 2026. But of course the costs are hitting us now while the full efficiency only comes in 2026, and potentially 2027 when we are at a stable rate," CFO Thomas Toepfer said in an interview. Airbus is also building two new assembly lines. Industry sources told Reuters such spending has been running over-budget in the civil business for part of the first quarter. Toepfer declined to comment on first-quarter activity but said "acceleration" or ramp-up costs would pay off over time. In 2023, Airbus hired 13,000 people including 10,000 new posts. "Why is that? Because we do not want to create our own bottlenecks in a supply environment which is anyway challenging," Toepfer told Reuters. Airbus reaffirmed the 75-a-month target. "We are on the trajectory to reach the rate," Toepfer said.<br/>