IATA chief pours cold water on Airbus jet output increase

© Reuters. FILE PHOTO: Willie Walsh, head of the International Air Transport Association (IATA), attends a meeting in Brussels, Belgium, March 3, 2020. REUTERS/Johanna Geron

By Tim Hepher, Sarah Young and Laurence Frost

PARIS/LONDON (Reuters) -The airline industry’s most senior representative on Friday cast doubt on plans by Europe’s Airbus for sharp increases in jetliner production, saying they appeared overly optimistic.

Willie Walsh, director general of the International Air Transport Association, voiced scepticism a day after Airbus published proposals to almost double single-aisle production to as high as 75 jets a month by 2025.

“Let’s wait and see, because obviously there is a huge disconnect between what the manufacturers say they’re going to produce and what the airlines decide to buy,” he told Reuters.

“So, you know that they’re in the business of selling. I don’t see that there’s going to be the requirement for whatever it is they’re producing,” he added in an interview.

Geneva-based IATA has no day-to-day role in airplane negotiations, but Walsh’s voice as a powerful buyer was for years among the industry’s most influential as the former head of British Airways and then its parent group IAG (LON:).

Airbus Chief Executive Guillaume Faury defended the increases on Thursday, telling Reuters pent-up demand for flights on medium-haul jets was “very strong”.

Investors pushed shares in the world’s largest planemaker up almost 10% on Thursday, followed by another 2.3% on Friday.

Leasing company executives and some suppliers have responded more cautiously, amid what industry sources described as a standoff between Airbus and some suppliers over who should pay for investments needed to get output to pre-crisis levels.

READ  Wall Street Week Ahead: Big tech nervousness prompts calls to diversify

Faury sought to allay such concerns, saying the detailed new roadmap provided by Airbus would allow suppliers to plan industrially and raise any necessary funding from markets.

Both Airbus and its U.S. rival Boeing (NYSE:) sell jets years before they are built and have several years of output on order.

Raising the speed at which jets are produced would allow them to burn through existing orders and generate cash more quickly. But those like Walsh who voice caution believe weakened airlines may fail to take delivery or suppliers may falter.

Leasing companies are also traditionally wary of higher production in order to protect the value of existing fleets.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

READ  Judge temporarily blocks U.S. ban on TikTok downloads from U.S. app stores



Please enter your comment!
Please enter your name here