Airbus Group performed a partial U-turn on plans to cut production of its profitable A330 aircraft on Wednesday, easing the delicate transition to newer models as it posted 2015 profits in line with expectations.
The European planemaker said it now planned to build seven A330 wide-body jets per month from 2017, partially unwinding recent staggered cuts in output to six from 10 a month as it prepares for its new A350 jetliner and an A330 upgrade.
Demand for the current generation of jets such as the 250- to 300-seat A330 faces a broad decline as a new generation of fuel-saving airplanes enters the market.
But Airbus’s most profitable wide-body jet has gained some respite due to the collapse in oil prices, which have made some airlines pause investment in newer, more efficient models.
The move to reconsider the decline of one of its two main sources of cash and profits came weeks after Iran provisionally agreed to buy 45 A330 jets as part of a $27 billion deal following the lifting of sanctions, but Airbus said it would have gone ahead anyway because of other deals.
That should be enough to put a floor under production until a revamped version of the A330 enters service at the end of 2017, chief executive Tom Enders said.
After several years of ballooning orders, many analysts continue to express concerns about the aerospace cycle due to a recent dip in overall demand and concerns over the economy.
Airbus reiterated a cautious outlook for 2016, underlining what many analysts see as a tricky, transitional year between old and new models at Airbus and rival Boeing.
Airbus said 2015 operating earnings before one-off items rose 2 per cent to €4.13 billion as revenue gained 6 per cent to €64.45 billion. Analysts on average predicted core profit of €4.11 billion on sales of 64.74 billion.
Airbus Group said it expected stable underlying operating profit and cash flow this year. – Reuters