by Industry Editor and Alan Tovey, The Daily Telegraph, January 13, 2017
Airbus chiefs have reaffirmed their commitment to the slow-selling A380 “superjumbo” as they announced record annual deliveries of its family of aircraft.
The double-decker A380 airliner has gathered just 319 orders in total. Its failure to win new customers over the past few years has led to speculation it could be for the chop.
At last year’s Farnborough Airshow, Airbus announced it would slash the rate it produces the A380 to just 12 a year, less than half the 2016 rate of 27.
However, Fabrice Bregier, president of Airbus commercial aircraft, said he was certain the superjumbo’s time would come.
"Some 10pc of the passengers going through London Heathrow are on the A380," Mr Bregier said, adding this figure is steadily rising. "What I have to accept is the very slow commercial performance we have with the A380. But there is a future with this aircraft: more airports will become like Heathrow with congestion and this aircraft will have a bigger market share.”
Sales chief John Leahy echoed his boss's convictions. “There is no doubt the market is soft at the moment but it is a matter of timing - and I believe it will be sooner rather than later,” he said.
“We have to shift to bigger aircraft and all economic indicators point to that. Air traffic doubles every 15 years and there is no more room - I can’t comprehend how the market will be satisfied without bigger aircraft.
Airbus chief executive officer Tom Einders, Gael Meheust, senior vice president for sales and marketing CFM, and Iran Air chief executive officer Farhad Parvaresh talk at the event in Toulouse
“China might be able to build new mega airports but you just can’t build another Heathrow or Charles De Gaulle or LAX [Los Angeles International Airport]."
The company would break even on the giant jet at the lower production rate, said Mr Bregier, adding that Airbus “would get through this slow time for the A380” and he that he hoped the rate would increase with “additional evolutions of the A380 family”.
This could be a signal that a version with different engines or a new design capable of packing in more passengers may be back on the drawing board.
During 2016 Airbus handed over a total of 688 airliners to customers, up 8pc on the previous record of 635 set in 2015.
However, the figure puts it behind arch-rival Boeing, with the US plane-maker having announced earlier this month that it delivered 748 jetliners last year.
Airbus Aircraft chief excutive officer Fabrice Breigier delivers a speech at the event
Toulouse-based Airbus has been hampered by problems with suppliers failing to deliver components on time and of the right quality in the past. Last year Mr Bregier publicly shamed one supplier over its failings.
Updating on supply chain issues, he said the programmes had largely been “de-risked”, and predicted deliveries going above 700 in 2017. The company is targeting a production rate of 60 a month of its best-selling A320 family of small airliners by mid-2019. The A350 programme - Airbus’s most modern jet - is targeting a rate of 10 a month by the end of 2018.
Airbus landed 731 orders for new aircraft in 2016, worth $132.7bn at list prices, though the true figure is likely to be much lower as aircraft are generally sold at a large discount.
The order total includes a late surge with 320 orders booked in December, though it is still a significant drop on the 1,080 announced the previous year.
By comparison, Boeing announced orders for 668 aircraft in 2016, down 13pc on the previous year.
'Hoarding' orders
Mr Leahy denied that the company “hoarded” orders to announce at set-piece events such as Wednesday’s annual conference.
“We do not save up orders,” he said on the sidelines of the event. “We use the year-end as a deadline to work to. It’s not like the price would suddenly change if we did not meet that deadline.”
Notable customers in the late surge included Iran Air, with the national carrier agreeing to take 98 aircraft from Airbus now that sanctions against the country have been lifted.
Both Airbus and Boeing are eager to break into the market which has been closed for almost 40 years, with both landing significant orders from Tehran.
Airbus is the first to deliver to Iran, handing over one of its A321 airliners at ceremony on Wednesday afternoon at the company’s Toulouse base.
Iran is likely to be a massive growth area for Airbus and Boeing as passengers become at ease with flying again, according to the boss of the national carrier.
Speaking as he took delivery of the first of 100 new planes Iran Air has ordered from Airbus, Farhad Parvaresh, chairman of the airline, said his country has seen “tremendous” growth since sanctions were lifted early last year.
“In the past six to seven months there has been 20pc increase in passenger numbers,” he said.
“In Iran many people are afraid of flying, but people will definitely fly on newer planes.”
Iran’s fleet of passenger aircraft has some of the oldest examples flying in the world and the country has a poor safety record after being cut off from international markets by sanctions for almost 40 years.
The country’s airlines have had to resort to third-party deals to source aircraft and parts as a result, contributing to a spate of accidents.
Mr Parvaresh said his fellow citizens had instead relied on long road trips because of safety fears.
“I have heard that we have 20,000 people killed on the roads a year,” he said, adding that a new fleet of aircraft would “give people a good feeling, and so they will fly”.
Airbus is not the only beneficiary of the thaw in relations with the West. Boeing has signed an 80-aircraft deal with the country.
However, there have been concerns about how the sales will pan out. While on the campaign trail, president elect Donald Trump called the agreement between Boeing and Iran “a disgrace, an embarrassment... one of the worst deals I’ve ever seen negotiated in my entire life”.
However, Mr Parvaresh called the Airbus deal a “new, magnificent chapter and a bright day for the EU and Iran… that will generate peace and friendship”.
This article was written by Industry Editor and Alan Tovey from The Daily Telegraph and was legally licensed through the NewsCred publisher network.