June 28, 2012 / 12:22 AM / 5 years ago

Airbus mulls U.S. assembly plant: sources

An easyJet Airbus A320 'Willy Brandt' is pictured during its name giving ceremony at the airport terminal of the future Berlin Brandenburg international airport Willy Brandt (BER) in Schoenefeld south of Berlin, April 23, 2012. REUTERS/Fabrizio Bensch

(Reuters) - Europe’s Airbus is seriously studying the possibility of opening an assembly line in the United States, marking a direct challenge to Boeing in its home market as competition heats up in the global jet market, people familiar with the matter said.

The plan calls for the possible production of A320 narrowbody jets, Airbus’s best-selling model, most probably in Mobile, Alabama, where EADS had planned to assemble U.S. tanker aircraft in a Pentagon contest it lost to Boeing (BA.N) last year.

Airbus and its Franco-German parent company EADS EAD.PA have said for some months that they were studying reshaping the plan to establish a foothold in commercial aircraft production in the world’s largest single passenger-jet market.

One of the sources did not rule out an imminent announcement.

But an Airbus spokesman said the company had not yet completed its studies.

“No decision has been taken,” Airbus spokesman Stefan Schaffrath said, declining further comment.

Airbus Chief Executive Fabrice Bregier was quoted in a Spanish newspaper on Wednesday as saying the planemaker was actively looking at a possible new assembly plant.

“This is part of the brainstorming we are doing regarding our international development,” El Economista quoted him saying.

Setting up in the United States would boost Airbus’s presence in the key U.S. market as it enters a phase of fleet renewal, and would reduce currency risk by increasing its exposure to costs in dollars, the currency in which aircraft are sold.

It would be the second Airbus assembly plant outside Europe.

None of the sources agreed to speak publicly on the matter because decisions have not yet been finalized.

Airbus is currently the world’s largest producer of passenger jets ahead of Boeing. It assembles in Toulouse, France, the German port city of Hamburg and, since 2009, in Tianjin outside Beijing, China. Airbus said earlier this month it had started talks to extend the Tianjin venture beyond 2016.

When EADS lost the tanker contest to Boeing, analysts said the long, politically charged competition had focused industry attention on Alabama and fostered a belief that this could lead to future projects.

The original tanker proposal included a kernel of commercial production in Alabama with plans to assemble commercial freighters alongside the U.S. Air Force refueling planes.

But the new proposal would spread its reach to passenger jets, a much larger market in which Airbus and Boeing compete fiercely for the lion’s share of a global jet market estimated at $100 billion a year.

Alabama and the U.S. South have made strides in recent years in gaining aerospace and other manufacturing work.

Aerospace and defense industry employment in Alabama rose 13 percent from 2002 to 2008, according to a study by the Alabama Aerospace Industry Association. High-tech space jobs are centered around Huntsville, with Boeing and Lockheed Martin (LMT.N) as major employers.

Reporting by Kelli Dugan in Mobile, Alabama; Tim Hepher in Paris; Karen Jacobs in Atlanta; Andrea Shalal-Esa in Washington; Editing by Gary Hill

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