As wraps up a record year of orders and deliveries and focuses on 2012, the aircraft maker cites adherence to the milestone as the biggest internal risk to executing next year’s plan and the turbulence of the Western economies as the largest external risk.
That is the message Airbus CEO Tom Enders is delivering to investors.
Airbus this year delayed the in-service date for the A350-900, the lead aircraft, with first delivery now planned for 2014. The next program steps are to equip the static test model with tubes, pipes and stress gauges. The assembly process will begin in early 2012. The assembly process for the first flight aircraft will begin in May or June, Airbus COO Fabrice Bregier says. Flight testing is set to start in the first half of 2013.
Although Airbus officials are moving cautiously into next year on the A350, they also see plenty of upside for the business, with pricing continuing to improve and the expected improvement inprofitability still holding, Enders notes.
Airbus plans to deliver 30 A380s next year, and production of the aircraft is expected to reach about 3.5 units per month in February 2013. Also, Bregier says operational reliability is improving and has reached 98.5% on the last 25 aircraft delivered.
Longer-term, he says the production ramp-up should drive earnings growth through 2016, with year-over-year pricing improvement. Around 2015, deliveries of the, which is commanding premium pricing, also will come into play.
Hans-Peter Ring, CFO of Airbus parent, adds that despite an unstable macro-economic environment, there are no signs of “exceptional” postponements or cancellations. However, Airbus is maintaining the “watchtower” process, used in 2008 and 2009 to track all planned deliveries and major customer adjustments, in case it should need it again.
One of the medium-term concerns is funding deliveries, with long-term dollar shortages and banks hamstrung by increasing capital reserve requirements under the Basel III accord. Costs are increasing. Ring stresses that EADS will act only as a lender of last resort, but that the company is working to bring new lenders into the business and also is looking at euro financing options.