More customers express frustration over Airbus A320neo delays
Just as Airbus revealed having increased its production rates in the first half of 2019, particularly ramping-up production of the A320 Family aircraft, increasing delivery rates for the same time period have set the manufacturer on course to beat those of rival Boeing by the end of 2019. However, the task to keep up with production targets and delivery rates poses a challenge, as some customers share their frustration over delays.
Within the first three months of 2019, Airbus deliveries rose by 28%, marking the first time in eight years that the Toulouse-based manufacturer surpassed Boeing. Within the first six months of 2019, Airbus has delivered 389 commercial aircraft ‒ over 80 more than during the first half of the previous year (303 in H1 2018).
However, with the delivery target of 880 to 890 commercial aircraft in 2019 and customers, more or less subtly, already complaining about the delays, current deliveries remain a challenge, as the manufacturer also admits. “The second half of the year in terms of deliveries and in particular free cash flow continues to be challenging,” is noted in H1 2019 statement by Airbus.
Still waiting for the NEOs
On July 30, 2019, BOC Aviation has revealed lagging deliveries of seven A320neo aircraft that could potentially stretch into the next year. In particular, the lessor stated that: “We now expect delivery delays could result in up to 30 aircraft being delayed out of 2019, including three for which an airline customer has the right to acquire the aircraft on delivery,” as noted in a statement.“These presently comprise up to seven Airbus A320NEO aircraft and up to 23 Boeing 737 MAX aircraft.”
More recently and more bluntly, William Walsh, IAG CEO and Executive Director, has opened up about A321LR delivery delays, calling them “unacceptable” and openly urging Airbus to “improve their performance”.
“Disappointed, as you've heard me say previously, with the performance of Airbus,” Walsh told investors during Q2 2019 earnings call on August 2, 2019. “Very poor delivery from Hamburg on the A321. It's not just for us, as you know. I'm sure by now you've heard every airline that is excited about taking the 321LR expect - express huge disappointment about the delays that they're encountering.”
“We need Airbus to improve their performance, and they need to get working on that very quickly because, quite honestly, the delays that we're seeing are just completely unacceptable, and it is impacting on the growth plans that we have. That's particularly true with what we want to do with Aer Lingus on the transatlantic,” the IAG chief stated.
The Aer Lingus transatlantic situation Walsh is referring to, dates back to March 2019. Back then, Aer Lingus, the Irish carrier belonging to IAG, announced postponing Montreal-Dublin service, which was previously expected to commence on August 8, 2019. Instead, the airline now plans to open the route in summer 2020. IAG group states it had to push back the launch due to ongoing A321 delays from the Hamburg facility.
As for the newest member of the Airbus A320neo family, on June 18, 2019, IAG announced an order for eight A321XLR aircraft for Iberia and six for Aer Lingus, plus 14 options. Both airlines will be among the launch customers for the extra long-range narrow-body aircraft with their first deliveries scheduled for 2023. The A321XLR will be used to expand both Aer Lingus and Iberia’s existing long-haul fleets.
However, Walsh made it clear that deliveries might affect the group’s further aircraft purchase options. “[...] In fact, as you can see from this, we still have a number of outstanding aircraft to be decided on. So we're pleased so far with what we've ordered, but there is more work that we need to do,” Walsh told investors.
During the Paris Air Show back in June 2019, International Airlines Group (IAG) (IAG) announced its intention to acquire 200 Boeing 737 MAX jets. The 200 737s order marks a subtle yet significant change in the group’s fleet structure. IAG Group, the parent company of British Airways, Iberia, Aer Lingus, and Vueling, has a combined fleet of 588 aircraft (as of June 30, 2019).
While the U.S. plane maker is already IAG’s manufacturer of choice for wide-body aircraft, so far most of its narrow-body planes were made by Airbus. In total, IAG airlines operate 373 Airbus narrow-bodies (ranging across Airbus A318, A319, A320 and A321 variants) and 23 Embraer aircraft (E170 and E190). Of the wide-body aircraft, it has 72 Airbus (A330, A340, A350, and A380) and 121 Boeing (747, 777, 787) airliners.
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