A flurry of plane orders to end the year hasn’t camouflaged Airbus’ woes after a management shakeup and in light of its difficulties in selling wide-body jets. Bloomberg
Airbus SE completed the year doing what it does best: selling its bread-and-butter narrow-body aircraft.
The European manufacturer late Thursday firmed up its biggest-ever order from Indigo Partners for 430 A320 aircraft — a contract that was previously announced — while also unveiling a new order for 50 re-engined versions of the same jet. All told, the flurry of activity during the past two weeks has totaled 705 single-aisle plane orders with a sticker price of $81.5 billion.
The A320’s success, coming in the final days of outgoing sales chief John Leahy’s two-decade tenure, provides some respite for Airbus following a tumultuous few weeks after the planemaker unveiled a top management shakeup. The orders for smaller jets also expose the flank that’s opened up at the other end of the manufacturer’s product line-up: wide-body and ultra large jumbos that are becoming increasingly hard to sell.
As if to hammer home that point, between orders during the night, Airbus confirmed an event scheduled for this week to mark the delivery to Qatar Airways Ltd. of its first A350-1000 would be delayed until early in 2018 as the plane undergoes final preparations. The move is the latest in a series of setbacks for the biggest A350 model after United Airlines and Cathay Pacific Airways Ltd. switched to the smaller -900 model, and adds a blemish to Airbus’s push to bring that jet to market.
The delay is also further evidence of Qatar Airway’s fickleness as a customer after past delays and outright refusals by the airline of deliveries of both narrow and wide-body jets, including a move earlier this year to scrap orders for four A350s. The carrier’s order backlog has come into focus amid the Saudi Arabia-led isolation of its home country that has forced it to scrap and divert routes.
At the same time, a much-needed follow-on order for Airbus of A380s from Emirates, the biggest customer for that aircraft, remains elusive, despite signals by the manufacturer just a few weeks ago that a deal could materialize before year-end. Toulouse based Airbus, which was widely expected to sign the A380 contract at the Dubai Air Show in November, needs the order to bulk up its backlog for the aircraft and keep the loss-making program alive.
Gaining clarity on the future of the A380 will be at the top of the to-do list for outgoing Chief Executive Officer Tom Enders, who revealed in December plans to step down in 2019, and his second in command Fabrice Bregier, who will be replaced in February by Guillaume Faury, CEO of the helicopters business.
Expressing disappointment that a deal with Emirates failed to materialize at the Dubai event, Bregier said in November he was confident Airbus could secure an order before the end of the year. The executive has since said that should an order come, Airbus would be willing to commit to keeping the program going for another decade. Emirates President Tim Clark has said talks derailed in part because of the airline’s concerns about the future of the model.
While U.S. rival Boeing Co. has had similar difficulties winning orders for its biggest wide-body jets, it has managed to sell the smallest version, the 787, and has committed to lifting production rates for the aircraft.
©2017 Bloomberg L.P.
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Author: Ryan Wolkov
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