Airbus cuts back production

Airbus has announced production of the A400M is to be scaled back from 15 aircraft in 2018 to only eight in 2020.

Airbus has announced it is cutting back production of the A380 and the A400M. Sales of the super jumbo have not been as spectacular as was expected and the multinational came close to shutting down A380 production in January until a lastminute order announced at the Dubai Air Show. Dubai’s Emirates Airline placed a firm order for 20 aircraft with an option for 16 more in a deal worth $16 billion. In the March 7 announcement, Airbus said deliveries would fall to six aircraft a year from 2020, down from an anticipated 12 this year. The Emirates aircraft are slated to be delivered from 2020. Cutting production rates is a tried and tested tactic from Airbus. At the 2016 Farnborough Air Show, Airbus Chief Executive Officer Tom Enders announced the company was adjusting its production rate from 27 aircraft a year in 2015 to 12 by 2018. Six aircraft a year is not sustainable and the company would lose money on such a production rate, but it may provide enough time for other carriers to decide the aircraft fits their future plans, especially if the price comes down. International Airlines Group (IAG), the controller of Aer Lingus, Vueling, Iberia and British Airways, which operates 18 A380s, said on March 6 it would consider buying more of the type if they were cheaper. Reuters reported IAG’s Chief Executive Officer Willie Walsh as saying: “The pricing that Airbus has offered in the past is unacceptable to us. We’ve said very clearly to Airbus, if they want to sell A380s, they need to be aggressive on pricing and when they work out how to sell the aircraft, knock on our door and we’ll talk to them.”

Similarly, the innovative A400M multi-role tanker and transport, Europe’s biggest defence project, has experienced delays throughout its development programme and is behind schedule with deliveries. Some of the launch customers for the airlifter have already reduced the number of aircraft they require and there have been acrimonious negotiations over price. An expected rush of orders has not been forthcoming. In February’s statement, Airbus, which has been ramping up production as problems have been solved or for which temporary fixes are in place, said production will be scaled back from 15 aircraft in 2018 to only eight in 2020.

Such dramatic reductions will inevitably affect suppliers, contractors and Airbus personnel across Europe and beyond. Airbus said about ten sites in Europe would be affected. It did not identify them, but said most workers would be offered alternative roles within the company. Trades unions were not confident that reassignment would be a viable option in Spain (Seville houses the A400M final assembly line) or in Britain. Estimates suggest Germany could be the hardest hit with as many as 1,925 losing their jobs, particularly in Bremen and Augsburg. Spain could see the loss of 860 positions, France 470 and the UK 465 for a Europewide toll of 3,720.