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Airbus exec says wary engine makers will meet demand for new jets By Reuters

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© Reuters. FILE PHOTO – Christian Scherer (Airbus Chief Commercial Officer) is interviewed in an interview by Reuters on October 4, 2020, at the International Air Transport Association’s Annual General Meeting. REUTERS/Brian Snyder

By Tim Hepher

BOSTON (Reuters). – Airbus will continue to monitor increases in jet output. It believes that engines makers who doubt the plan won’t be able to resist future demand, Airbus’ sales chief claimed. This comes as some airlines are reporting signs of a recovery after the pandemic.

Airbus says it hopes to nearly double the production of jets in the next few years, once borders reopen. The engine makers are worried that doing this too soon could disrupt their recovery and force existing jets to retire rather than being repaired.

Christian Scherer from Airbus was interviewed at the annual industry event. He suggested the possibility that Airbus might take advantage of the intense competition among engine manufacturers to get its A320-family production plan.

There will be engines. “That is the beauty in having engine competition within the program,” he said to Reuters while speaking at a meeting the International Air Transport Association.

There is much rhetoric, but at the end of it all, if customers demand modern planes… then no engine manufacturer in the world will be able resist the call to nature. So I’m not concerned about it.”

Airbus released a mixture of targets and scenarios in May. They could raise narrowbody A320-family production to 75 jets per month by 2025, from approximately 40 this year and 60 before COVID.

France’s Head of State Safran (PA) Part of the CFM venture General Electric (NYSE:) stated earlier in the year that he wasn’t sure if rates higher than 60 can be sustained.

Also speaking in July, Greg Hayes, CEO of Pratt & Whitney parent Raytheon Technologies (NYSE:), expressed surprise at “pretty aggressive” Airbus output plans.

Each engine maker offers competing engines for the A320neo. This is the Airbus aircraft with the largest sales. It competes against the Boeing (NYSE) 737 MAX.

If Airbus decided to increase its production beyond the target 63 units per month, it said that they would not.

He stated, “It is an option right now. The plan is not committed. But it is a sizing exercise that we must do because it corresponds to demand – verified demand, not theoretical demand – that we are experiencing, including in meetings we are having right here.”

Scherer spoke on the sidelines at the International Air Transport Association’s annual meeting, during which airlines, their creditors and suppliers, as well as leasing companies, discussed possible jet orders in the midst of heavy restructuring.

Scherer addressed the concerns of smaller suppliers about the possibility that the planemaker might increase output but it would only do so temporarily. This will leave them with the burden of purchasing new equipment in the event of a recovery.

IATA forecasted a cautious rebound by several airlines.

“I think recent history has shown Airbus has been able to manage its supply and demand very, very rigorously almost to the dot on the right spot,” Scherer said.

“You have to trust that we will continue to do that in the future and not shoot ourselves in the foot by overproducing airplanes that we can’t sell.”

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