Airbus to Increase A320 Short-Haul Aircraft Production
MUNICH (Financial Times) - Airbus said it was ramping up production of its single-aisle A320 aircraft range amid strong global demand and proposed a record dividend, sending shares up more than 6 per cent on Friday.
The European aerospace group said it would take a charge of more than €500m due to delays to its A400M military transporter program, however, and lowered the production rate of its wide-bodied A330 model.
Tom Enders, chief executive of Airbus Group, told reporters in Munich it was a "pretty good year for the company, despite some challenges internally and externally”.
The company announced on Friday that it would increase output of its A320 family to 50 aircraft a month by 2017, mirroring similar moves from rival Boeing, amid strong demand for more fuel-efficient short-haul passenger aircraft worldwide.
This is an increase from 42 currently and more than the 46 per month it had previously planned for 2016. Boeing has said it plans to increase its single-aisle 737 production rate to 52 per month by 2018.
The plan was announced as Airbus, which draws two-thirds of sales from its airliner unit, said it planned to make a record dividend payment of €1.20 a share, up from €0.75 the previous year.
It said that net income jumped 60 per cent to €2.3bn in 2014, on the back of a 5 per cent rise in revenues to €60.7bn. Earnings before interest and taxes and one off exceptional data-x-items were up 15 per cent to €4.1bn.
Shares jumped 7.6 per cent by midday to €55.52.
The company said it expected "slightly higher” deliveries for 2015, and reiterated plans to break even with its A380 superjumbo program, which has struggled to attract fresh orders.
The rise in profit came even as the company said it would take a charge of €551m on the back of delays to its €20bn A400M program, which has suffered amid problems in integrating the aircraft’s military capabilities.
In January, Mr Enders was forced to apologize for the delays, which prompted a management shake up, with the head of the military aircraft division, Domingo Ureña-Raso, being replaced by Fernando Alonso, head of flight test operations.
Airbus’ military aircraft unit also lost responsibility for oversight of the A400M’s production process. Instead, it will be passed to the group’s defense and space division, to which the military aircraft unit reports.
The company said it was lowering the production rate of its wide-bodied A330 model to six a month from 2016 as it moves to the new A330neo, a reworked version of its most-sold wide-body jet which was launched last year.
The transition from selling older aircraft to selling the new models — called Neos, or new engine options — is one of the most delicate challenges facing Airbus, posting a threat to margins as older models are often more heavily discounted.
Airbus expects to start delivering the re-engined A320neo by the end of 2015.
Airbus last year delivered its latest aircraft, the A350, to Qatar Airways. The wide-body jet, which took €10bn and nearly a decade to develop, is a direct competitor to Boeing’s 787 Dreamliner.
"We are focused on tackling our various operational challenges, including the A350 and A400M ramp-up and costs, first A320neo deliveries, boosting helicopter sales, and continuing the reshaping of our defense and space portfolio,” said Mr Enders.
The European aerospace group said it would take a charge of more than €500m due to delays to its A400M military transporter program, however, and lowered the production rate of its wide-bodied A330 model.
Tom Enders, chief executive of Airbus Group, told reporters in Munich it was a "pretty good year for the company, despite some challenges internally and externally”.
The company announced on Friday that it would increase output of its A320 family to 50 aircraft a month by 2017, mirroring similar moves from rival Boeing, amid strong demand for more fuel-efficient short-haul passenger aircraft worldwide.
This is an increase from 42 currently and more than the 46 per month it had previously planned for 2016. Boeing has said it plans to increase its single-aisle 737 production rate to 52 per month by 2018.
The plan was announced as Airbus, which draws two-thirds of sales from its airliner unit, said it planned to make a record dividend payment of €1.20 a share, up from €0.75 the previous year.
It said that net income jumped 60 per cent to €2.3bn in 2014, on the back of a 5 per cent rise in revenues to €60.7bn. Earnings before interest and taxes and one off exceptional data-x-items were up 15 per cent to €4.1bn.
Shares jumped 7.6 per cent by midday to €55.52.
The company said it expected "slightly higher” deliveries for 2015, and reiterated plans to break even with its A380 superjumbo program, which has struggled to attract fresh orders.
The rise in profit came even as the company said it would take a charge of €551m on the back of delays to its €20bn A400M program, which has suffered amid problems in integrating the aircraft’s military capabilities.
In January, Mr Enders was forced to apologize for the delays, which prompted a management shake up, with the head of the military aircraft division, Domingo Ureña-Raso, being replaced by Fernando Alonso, head of flight test operations.
Airbus’ military aircraft unit also lost responsibility for oversight of the A400M’s production process. Instead, it will be passed to the group’s defense and space division, to which the military aircraft unit reports.
The company said it was lowering the production rate of its wide-bodied A330 model to six a month from 2016 as it moves to the new A330neo, a reworked version of its most-sold wide-body jet which was launched last year.
The transition from selling older aircraft to selling the new models — called Neos, or new engine options — is one of the most delicate challenges facing Airbus, posting a threat to margins as older models are often more heavily discounted.
Airbus expects to start delivering the re-engined A320neo by the end of 2015.
Airbus last year delivered its latest aircraft, the A350, to Qatar Airways. The wide-body jet, which took €10bn and nearly a decade to develop, is a direct competitor to Boeing’s 787 Dreamliner.
"We are focused on tackling our various operational challenges, including the A350 and A400M ramp-up and costs, first A320neo deliveries, boosting helicopter sales, and continuing the reshaping of our defense and space portfolio,” said Mr Enders.