IATA chief pours cold water on Airbus output increase

Says there is huge disconnect between what manufacturers say and what airlines decide

PARIS/ LONDON:

The airline industry’s most senior representative on Friday cast doubt on plans by Europe’s Airbus (AIR.PA) 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 aircraft negotiations, but Walsh was for years among the most influential buyers as the former head of British Airways and then its parent group IAG.

Airbus Chief Executive Guillaume Faury defended the increases on Thursday, telling Reuters that pent-up demand for flights on medium-haul jets was “very strong”. Investors pushed up shares in the world’s largest planemaker by almost 10% on Thursday, followed by another 1.2% 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.

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

Both Airbus and US rival Boeing sell jets years before they are built and have several years of output on order.

Published in The Express Tribune, May 30^th, 2021.

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