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Airbus to increase jet output as profits rise

Airbus announced a hike in jetliner production on Wednesday, echoing plans by arch-rival Boeing as they battle to meet record demand for more fuel-efficient planes.

The news came as Europe’s largest aerospace group, previously known as EADS, unveiled higher 2013 profits, but also cautious forecasts for this year and fresh charges for its newest A350 model.

Airbus said it would raise output of its A320 family of small jets to 46 aircraft a month by the second quarter of 2016 from 42 now. Boeing’s rival jet aims to hit 47 a month by 2017.

Planemakers’ order books are bulging after a surge in demand for latest fuel economies, pointing to rising revenues from mid-decade but also putting unprecedented demands on a global network of suppliers. The increase means Airbus will be producing an A320 family jet, worth around $100 million at list prices, every seven working hours.

The ramp-up to 46 appeared at least partly to reflect already announced additions to capacity as a new assembly plant in the US state of Alabama prepares to come on stream.

Airbus has said it plans to start delivering jets from Mobile, Alabama from 2016, rising eventually to four a month. Those plans had not previously been included in Airbus’s main production target.

“Mobile is the next place where we will ramp up and we will start producing aircraft there in 2015, first deliveries should happen in 2016. Everything is according to plan and we are training our first American colleagues in Hamburg,” Airbus Group chief executive Tom Enders told Reuters. His comments appeared to confirm that Airbus would not cut output in Europe to make way for the new US plant.

“We looked for this step as this will help to boost organic growth,” DZ Bank analyst Markus Turnwald said in a note. “We see a rate of 48 in 2017 thanks to the new US factory.”

In order to avoid bottlenecks in its supply chain, Airbus has previously taken measures such as buying up a smaller supplier and reshuffling management at Premium Aerotec, one of its main in-house suppliers. Airbus said it had carried out a “comprehensive assessment” of its suppliers before taking the decision to produce more.