By Benjamin Katz 

TOULOUSE, France -- Airbus SE is ramping up production of its bestselling single-aisle jet, moving to fill a hole in the market created by the prolonged grounding of rival Boeing Co.'s 737 MAX.

Airbus said Thursday it had outlined plans to raise production of its A320neo to as many as 67 a month by 2023, from the current target of 63 a month in 2021. The A320neo competes directly with the MAX.

Both jets have become the workhorses of many airlines' commercial fleets. The fuel-efficient jets, with their extended ranges and low-passenger load, have been popular with airlines for their flexibility.

Airbus hasn't yet materially benefited from the grounding of the MAX, however. That is because both jets have been so popular that their order books stretch out for years. Airbus has struggled with production issues for many of its jets, making it difficult to ramp up output of the A320neo.

Underscoring the new pressure on Boeing, The Wall Street Journal earlier Thursday reported Nigeria's Green Africa Airways is nearing a deal for a major order of Airbus's smaller A220 narrow-body jets. The airline had previously placed a commitment for up to 100 Boeing MAX jets, an order that is now in jeopardy, according to people familiar with the matter.

A Green Africa Airways order could be announced later Thursday, according to the people. The Nigerian startup turned to Airbus amid uncertainty about when it would start receiving its MAX jets, after having to postpone the airline's launch, according to a company executive.

On Thursday, Airbus also said it had agreed to buy out its partner in the A220. The Journal previously reported Airbus was nearing a deal with Bombardier Inc. to take majority ownership of the program, previously called the CSeries. On Thursday, Airbus said it would buy out Bombardier's stake for $561 million, giving it a 75% stake. The Quebec government will retain a 25% stake.

Boeing grounded its latest version of the 737 last year after two crashes of the jet, which were blamed partly on a faulty flight-control system. The grounding has been extended to the middle of this year.

Boeing halted production of the plane late last year and has been forced to cut back planned deliveries of the aircraft. It has struggled to win deals for its planes amid the MAX crisis. Its order intake last year fell to a 16-year low. The company booked no new orders last month.

Airbus said, overall, its deliveries this year will reach 880 aircraft, topping last year's 863. Still, that represents a slower rate of growth as the company reins in deliveries of its wide-body jets.

Demand for those bigger planes has fallen as airliners gravitate toward the smaller, nimbler jets such as the A320neo. Airbus said it would hand over 40 of its bigger A330s this year, 13 shy of 2019's total. Production of its A350 twin-aisle will be kept just shy of its prior 10-a-month target.

Those moves follow two separate cuts made by Boeing to its 787 Dreamliner. That program has struggled with lower demand from Chinese airlines amid the U.S.-China trade war.

Airbus is also still running about six months behind schedule on narrow-body deliveries, Chief Executive Guillaume Faury said on a call with analysts. The delays are expected to continue for another 12 to 18 months, he said.

The company has been battling to deliver its customizable, larger and longer-range variant, the A321neo, which has made it more difficult to manufacture the jets using a cookie-cutter approach. Engine glitches are also holding back deliveries. Airbus has had to ship replacement engines to existing operators ahead of handing over new jets, Mr. Faury said.

Airbus said it swung to a loss in 2019 after taking a large charge to settle U.S., U.K. and French allegations of bribery. Airbus reported a full-year net loss of EUR1.36 billion ($1.48 billion), compared with a net profit of EUR3.05 billion in 2018.

The plan maker agreed last month to a EUR3.6 billion settlement with prosecutors, who alleged Airbus used middlemen to make payments to government and airline officials to win orders. Airbus, by settling, wasn't required to admit or deny the charges and avoided possible prosecution in the U.S. and the European Union. It has said it reported the payments to investigators, cooperated with them, and has changed its business practices to prevent further inappropriate payments.

Airbus said it also took a EUR1.2 billion charge related to its A400M military aircraft. Part of that was due to lower expectations for future sales, including from the "repeatedly extended" ban by Germany on exports to Saudi Arabia.

The company said its full-year sales rose 11% to EUR70.48 billion.

Airbus's adjusted earnings before interest and taxes -- which strips out one time items -- rose 19% to EUR6.95 billion from EUR5.84 billion. For its fourth quarter, adjusted EBIT came in at EUR2.81 billion.

--Alison Sider contributed to this article.

Write to Benjamin Katz at ben.katz@wsj.com

 

(END) Dow Jones Newswires

February 13, 2020 04:22 ET (09:22 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
Grafico Azioni Airbus (EU:AIR)
Storico
Da Feb 2024 a Mar 2024 Clicca qui per i Grafici di Airbus
Grafico Azioni Airbus (EU:AIR)
Storico
Da Mar 2023 a Mar 2024 Clicca qui per i Grafici di Airbus