Airbus, Boeing spar over jet production strategy

Mon Sep 22, 2014 6:25pm EDT
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By Tim Hepher

ISTANBUL (Reuters) - Airbus and Boeing clashed over jet production on Monday, with the European planemaker questioning the viability of its rival's proposals to hike output and Boeing insisting it will only build the number of jets that its buyers and suppliers can handle.

A debate over the sustainability of record production and burgeoning orders for jetliners dominated an aviation gathering in Istanbul, where a minority of participants expressed fears of a glut while most remained confident about air transport growth.

Despite the economic downturn, aircraft demand has been rising as cash-starved airlines upgrade to new fuel-saving models and emerging markets give rise to a boom in air travel.

Assembly lines for narrow body jets such as the Airbus A320 and Boeing 737 are running faster than ever and both the world's leading planemakers are studying plans for further increases after switching to new fuel-saving models in mid-decade.

But a senior Airbus AIR.PA executive warned against a "Field of Dreams" strategy of raising output in the hope of spurring more sales and vowed not to chase marginal deals.

"Smooth production is critically important to the manufacturers of aircraft ... but also to those who finance the aircraft," Leahy told the Istat Europe air finance conference.

"Running production up and chasing after orders and then doubling back down is not necessarily the right way to go," he said, pointing to a chart demonstrating greater historical production volatility at Boeing, which has been around longer.

Airbus says it is considering increasing production of its A320 family from 42 a month now to 46 a month in 2016. It is looking at a future increase to 50 A320 planes a month.   Continued...

The logo of Airbus Group is seen during the first public flight of an E-Fan aircraft during the e-Aircraft Day at the Bordeaux Merignac airport, southwestern France, April 25, 2014. REUTERS/Regis Duvignau