LONDON: The commercial aircraft unit of Airbus Group SE is confident in plans from engine maker Pratt & Whitney to solve production delays for its next-generation single-aisle planes, the A320neo, Chief Operating Officer for Customers John Leahy said.
“It is disappointing the situation we find ourselves in. But it’s a good engine for everything we can see. They have some production difficulties that they’re working their way through,” Leahy told reporters in New York after a gathering of aviation executives and analysts known as the Wings Club.
United Technologies Corp. said earlier this month it would deliver 150 of its Pratt & Whitney engines this year, missing its target of 200 and pressuring cash flow.
Separately, Leahy dismissed doubts over demand for the world’s largest passenger plane, the double-decker A380, after Airbus lowered production targets in July.
“Every 15 years, the industry is doubling in size,” Leahy said.
“So here you have London Heathrow, totally congested. JFK, congested. Los Angeles, congested. Hong Kong, congested. How are we going to double the traffic flows in the next 15 years if we don’t use larger aircraft like the A380?“
Despite that longer-term optimism, Airbus now is lacking in new orders for the A380.
In 2018, the company plans to cut the A380’s delivery target to 12 a year from 27 in 2015 and about half what is projected for this year, to prevent a glut of unsold planes.
Singapore Airlines Ltd. said this month it will not extend a lease that expires next year for one of its A380s. Leahy said the move was not surprising because Singapore tends to fly newer aircraft and has A380s still in the queue for delivery.
The airline was the first to put A380s into service and currently has 19 in its fleet.
In another development, Boeing and US trade officials declared victory in a long trade battle after the World Trade Organization ruled that the European Union failed to end illegal subsidies for Airbus.
The EU and member states did not implement an order to remove subsidies that Boeing alleges helped Airbus beat it in major multi-billion dollar contract battles, the global free-trade arbiter said in Geneva.
The WTO found that Airbus had won aircraft sales deals over Boeing in Europe, China, India and other countries helped by $22 billion in illegal subsidies, US Trade Representative Michael Froman said.
“This report is a sweeping victory for the US and its aerospace workers,” he said.
“We have long maintained that EU aircraft subsidies have cost American companies tens of billions of dollars in lost revenue, which this report clearly proves.”
Boeing claimed that the United States could now levy retaliatory duties against the European Union of up to $10 billion a year as a result of the ruling Thursday, although US officials refrained from saying they would take such a step.
“Today’s ruling confirms that Airbus both failed to withdraw old subsidies and instead put in place new subsidies for a grand total of almost $22 billion,” the company said.
The ruling came after a fight dating back to 2004 over support and subsidies given both sides’ aircraft builders.
The European Union said in a statement that it found some of the WTO findings “unsatisfactory,” noting it has the right to appeal the ruling.
It also pointed out that the WTO is likely to rule in coming months on EU and Airbus complaints about what they say is illegal US support for Boeing.
US trade officials did not say what their next step would be.
“We are ready to negotiate if it (the EU) is interested,” a US trade official said.
“It is disappointing the situation we find ourselves in. But it’s a good engine for everything we can see. They have some production difficulties that they’re working their way through,” Leahy told reporters in New York after a gathering of aviation executives and analysts known as the Wings Club.
United Technologies Corp. said earlier this month it would deliver 150 of its Pratt & Whitney engines this year, missing its target of 200 and pressuring cash flow.
Separately, Leahy dismissed doubts over demand for the world’s largest passenger plane, the double-decker A380, after Airbus lowered production targets in July.
“Every 15 years, the industry is doubling in size,” Leahy said.
“So here you have London Heathrow, totally congested. JFK, congested. Los Angeles, congested. Hong Kong, congested. How are we going to double the traffic flows in the next 15 years if we don’t use larger aircraft like the A380?“
Despite that longer-term optimism, Airbus now is lacking in new orders for the A380.
In 2018, the company plans to cut the A380’s delivery target to 12 a year from 27 in 2015 and about half what is projected for this year, to prevent a glut of unsold planes.
Singapore Airlines Ltd. said this month it will not extend a lease that expires next year for one of its A380s. Leahy said the move was not surprising because Singapore tends to fly newer aircraft and has A380s still in the queue for delivery.
The airline was the first to put A380s into service and currently has 19 in its fleet.
In another development, Boeing and US trade officials declared victory in a long trade battle after the World Trade Organization ruled that the European Union failed to end illegal subsidies for Airbus.
The EU and member states did not implement an order to remove subsidies that Boeing alleges helped Airbus beat it in major multi-billion dollar contract battles, the global free-trade arbiter said in Geneva.
The WTO found that Airbus had won aircraft sales deals over Boeing in Europe, China, India and other countries helped by $22 billion in illegal subsidies, US Trade Representative Michael Froman said.
“This report is a sweeping victory for the US and its aerospace workers,” he said.
“We have long maintained that EU aircraft subsidies have cost American companies tens of billions of dollars in lost revenue, which this report clearly proves.”
Boeing claimed that the United States could now levy retaliatory duties against the European Union of up to $10 billion a year as a result of the ruling Thursday, although US officials refrained from saying they would take such a step.
“Today’s ruling confirms that Airbus both failed to withdraw old subsidies and instead put in place new subsidies for a grand total of almost $22 billion,” the company said.
The ruling came after a fight dating back to 2004 over support and subsidies given both sides’ aircraft builders.
The European Union said in a statement that it found some of the WTO findings “unsatisfactory,” noting it has the right to appeal the ruling.
It also pointed out that the WTO is likely to rule in coming months on EU and Airbus complaints about what they say is illegal US support for Boeing.
US trade officials did not say what their next step would be.
“We are ready to negotiate if it (the EU) is interested,” a US trade official said.
