Airbus Will Take Another Year to Catch Up on A320neo Output

(Bloomberg) -- Airbus SE needs at least another year to get production of its A320neo back on track and stabilize deliveries following manufacturing and design snags at its engine suppliers, according to a senior executive.

The plane maker was forced to adjust the timing of its A320neo handovers at the start of 2018 after a fault was uncovered with Pratt & Whitney engines. Another supplier, CFM International, failed to get on top of its own production issues at core suppliers. Airbus said it's sticking with guidance for overall deliveries of around 800 aircraft this year.

“A lot is going to depend on the availability of engines and we've got to make sure that we firmly know what suppliers can do,” Chris Buckley, Airbus's executive vice president for Europe, Africa and Asia Pacific, said in an interview in the Indian Ocean nation of Mauritius. “It'll certainly take another 12 months to catch up.”

The comments pushed shares down by as much as 2.1 percent. They were 1.3 percent lower at 105 euros as of 4:55 p.m. in Paris.

Airbus had initially planned to catch up on its schedule this year before the flaw at Pratt led to a three-month halt in deliveries, people familiar with the matter have said. The snag added to production issues plaguing CFM, leading to as many as 100 jets sitting outside factories in June awaiting engines. The number has since been halved to about 50 as Pratt picked up the pace on deliveries of its geared turbofan engines.

“Slowly but surely we're adjusting to the situation,” Buckley said. “What we need to do is get some stability back in delivering our aircraft -- on time to our customers as they expect.”

Meeting its full-year delivery target “obviously leaves a lot to do in the second half,” the company said in a separate statement by email. “Resources and capabilities are mobilized and the engine manufacturers are working hard to meet their commitments.”

A decision by Airbus's head of sales, Eric Schulz, to step down last week “came as a bit of a shock,” Buckley said, adding that Schulz's successor, Christian Scherer was “ready and willing” to take over the role. Scherer had been a candidate to replace Schultz's predecessor.

To contact the reporters on this story: Kamlesh Bhuckory in Port Louis at kbhuckory1@bloomberg.net;Benjamin Katz in London at bkatz38@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Tara Patel