Airbus grapples with lack of available A320 delivery slots
May 11, 2022
Airbus faces greater pressure to increase production than other airframers in order to attract new single-aisle orders. The European manufacturer's head of business analysis and market forecast, Bob Lange, said during a panel discussion at the Airline Economics Growth Frontiers conference in Dublin on 9 May that it's "extremely difficult" to find available production slots for A320-family jets before 2028. Lange acknowledges that earlier slots are available under aircraft orders placed by lessors. But he cites the lack of available slots as a key reason to increase production. Airbus is under way to raise monthly A320-family output to 65 aircraft by mid-2023 and, earlier this month, disclosed a plan to raise production further to Rate 75 in 2025. The airframer delivered 49 and 37 A320-family jets in March and April, respectively. Boeing has available 737 production slots from 2025, said the US airframer's vice-president of commercial marketing, Darren Hulst, during the discussion. Embraer strategic marketing director Daniel Galhardo, another panellist, said that the company still has "opportunities" for its E-Jet family in 2023. The Brazilian airframer delivered 48 E-Jets in 2021, and six during the first quarter of 2022. Galhardo says that Embraer is in the process of ramping up production with a target of reaching a pre-Covid rate of around 90 commercial aircraft deliveries per annum in 2024. ATR too has available production slots during the second half 2023. "I am a bit more flexible," says the turboprop manufacturer's head of commercial for Europe and North America, Mark Dunnachie. He notes that order and delivery cycles for regional aircraft tend to be much shorter than for mainline jets. Following 31 deliveries in 2021, the airframer jointly owned by Airbus and Leonardo plans to increase annual production to 50 turboprops in 2024. Boeing, for its part, has reached a monthly target of producing 31 737s "through the supply chain", Hulst says. He declines to specify further rate targets and says that Boeing's current objective is to stabilise production. At the end of the first quarter, Boeing had 320 undelivered 737 Max jets in its inventory, the company said in April. Hulst estimates that airlines will require 130-135 new single-aisles per month over the next decade. He argues the "core" of that demand will be in the capacity segment served by the 737-8 and -9. "We are not going to see a wholesale shift from 160/170-seat aircraft to an average seat count over 200," he says. Hulst adds that the in-development 737-10 will "complement" that market. Airbus's Lange responds that Boeing's narrowbody outlook does not give him much reason for concern as he sees an "inherent strength" in the European airframer's narrowbody series. Nearly 60% of the airframer's A320-family backlog is for the A321neo, with the balance mostly attributed to the A320neo and, to a marginal extent, A319neo. Despite the assuring orderbook for the largest model, Lange does sound a warning about Airbus's production prospects amid supply-chain challenges and wider uncertainties. "I am much more concerned that we focus all our attention on producing the aircraft, getting back to delivering the aircraft on time, getting back to delivering them on quality." He adds: "It's not something we are happy with." Air Lease chief executive John Plueger said during a separate presentation at the Growth Frontiers conference that "every single" recent narrowbody delivery for the US lessor has been one or two months late. Citing a deal with Airbus for 116 mostly single-aisle aircraft which was finalised in December 2021, Plueger says the airframer sent a letter weeks later, in January, to notify Air Lease that all aircraft from that deal would be delivered later than previously specified. Plueger suggests the delays may have been visible when the deal was signed. In any case, he says, "this [situation] is going to be with us for a while".
EasyJet limits A319 seat capacity to cut crewing
May 10, 2022
EasyJet will limit passenger numbers on its Airbus A319s this summer to just 150, freeing up a crew member, amid a staff shortage across the airline. The UK low-cost carrier was forced to cancel hundreds of flights earlier this year following an absence rate that at one point affected a fifth of its staff. This compares with a normal absence rate of 6%. The airline said it could handle up to 14%. "This summer we will be operating our UK A319 fleet with a maximum of 150 passengers on board and three crew in line with CAA regulations," says EasyJet. "This is an effective way of operating our fleet while building additional resilience and flexibility into our operation this summer where we expect to be back to near 2019 levels of flying." The action removes just six seats from the aircraft. Those last six seats would typically be booked in the final days before departure. Given this, EasyJet believes it will not be disruptive for passengers who have already booked and will not result in tickets being cancelled. The airline foresees no impact on its capacity guidance for the summer. It intends to fly around 300,000 passengers per day through the period. Analysis from investment firm Goodbody indicates that EasyJet's A319s are set to fly 32% of departures to end-October, or 104,550 flights, and account for 28% of its 57.4 million seats. "The proposal would take out ~0.6m seats from the schedules, or 1%, but allow EasyJet to deploy the residual 15.6 million seats flown by its A319s that might otherwise have been compromised. A neat solution for both issues," writes analyst Mark Simpson.
China Airlines swings to profit in first quarter
May 10, 2022
China Airlines made a net operating income of NT$3.6 billion ($121 million) for the first quarter ended 31 March, reversing the NT$469 million loss in the year-ago quarter. Operating revenue for the quarter came in at NT$37.2 billion, up 34% from NT$27.8 billion, the Taiwanese airline says in a filing with the Taiwan stock exchange. The carrier reported a pre-tax profit from continuing operations of NT$3.55 billion from the loss of NT$1.33 billion in the first three months of 2021. Profit attributable to owners of the parent during the quarter was NT$3.07 billion, versus the NT$1.02 billion loss in the year-ago quarter. Total operating expenses stood at NT$1.87 billion versus NT$2.14 billion in the first quarter of 2021.