Market News & Analysis
Airbus expands production following sales increase
City Index November 2, 2015 8:36 AM
Airbus is planning to increase production of its A320 jet airliner, following strong results in the third quarter.
The European aircraft manufacturer has said that revenue increased by six per cent during Q3 to €14 billion (£10 billion). In comparison, the company earned revenues of €13.3 billion for the same period last year.
A strong dollar benefited the company and led to sales growth across the firm's product range. Airbus now says it plans to capitalise on growing sales figures by ramping up production of its A320 to 60 per month in 2019. Currently, the firm manufactures 42 A320s a month.
Union officials told Reuters that the increase will lead to 150 extra jobs in Hamburg. Airbus plans to add a fourth production line at its facility there, which employs 13,000 people.
Commenting on the planned production increase, Airbus chief executive Tom enders said: "The healthy commercial aircraft market, robustness of our backlog and supply chain capability allows us to raise the single-aisle production rate."
Following news of the company's latest results - and its plans to increase production – shares in the company rose 4.6 per cent in early trading on Friday morning (October 30th).
During the first nine months of 2015, Airbus saw order intakes increase 42 per cent compared with a year earlier. The company reported €100 billion in sales of commercial aircraft and €4 billion of helicopter sales.
Airbus has also announced a €1 billion share buy back, which will be completed by the middle of next year. It says increasing the production of A320s will help to set off some of the issues it has had delivering other aircraft. Recently, the firm has had difficulty keeping up with demand for its A350. Both the A350 and A400M – a military aircraft – have carbon fibre structures. This design helps to improve the planes' fuel efficiency.
Mr Enders said in a statement that the company was "strongly focussed on programme execution, given our key operational challenges with the A350 and A400 ram-ups".
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