Europe'slargest aerospace group, Airbus, says it will increase output of its best-selling A320 jet as it reports an increase in full-year profits. Airbus had a record 1,619 new orders last year, 117 of which were from Turkish Airlines. European jetmaker Airbus Group said yesterday record demand for its civilian jetliners from airlines around the world drove higher sales and profits last year. The company, known until this year as EADS, said net profit rose 22 percent to 1.47 billion euros in 2013, up from 1.2 billion euros the previous year.
Airbus, which competes with Boeing in the multi-billion-dollar market for large civilian aircraft, forecast jet deliveries would remain at about the same level this year as last when it sold 626 aircraft. "We're not planning new adventures in 2014. The focus is on execution, execution, execution," CEO Tom Enders said at a press conference. Enders said that while Airbus will "take a little break" this year in terms of production, after 11 straight years of growth he predicted orders will remain higher than deliveries. Last year Airbus took in a record 1,619 new orders. In a statement, Airbus also announced plans to ramp up production of its single-aisle jets to 46 a month by 2016, from 42 now.
The A320 single aisle family of jets competes with Boeing's 737 and has seen high demand in recent years alongside exceptional growth in the air travel market in developing countries in Asia and the Middle East. Airbus' earnings came in below the 1.97 billion euro forecast of analysts surveyed by financial research firm Factset. The 2013 accounts were dented by higher costs connected to Airbus' new A350 twin-aisle jet, which Airbus hopes to start delivering to customers by the end of this year.
Airbus has received over 820 orders so far for the wide-body A350, with around 30 percent coming from Asian airlines. The region is a crucial market for plane makers because its economic growth is driving rapid expansion of jet fleets. Airbus shares rose 1.5 percent in early trading Wednesday on the Paris stock exchange, as investors applauded the group's hitting financial targets, including higher operating profit and better-than-expected free cash flow.
Airbus says the A350 program "remains challenging" after it took a 434 million euro charge against the program in the fourth quarter last year. Development of the jet, an intended rival to Boeing's 787 Dreamliner, cost around 10 billion euros over the last decade. Qatar Airways expects delivery of the first A350 in the fourth quarter of this year.
Airbus is in the midst of a corporate restructuring that will see it cut 5,800 jobs. A failed merger with British defense firm BAE Systems scuttled Airbus' plans to grow its own defense business, which now accounts for 30 percent of the group's total sales. A slowdown in U.S. and European military spending negatively impacted both Airbus and Boeing's defense businesses.
THY expects 117 new Airbuses
Turkish Airlines, signed a contract for up to 117 Airbus A320 family aircraft last year in the largest order ever placed by a Turkish carrier. The engine selection will be made at a later date. "At Turkish Airlines, our customers expect the best," said airline's chief marketing officer, Faruk Çizmecioğlu.
"The A320 family, with its economic benefits combined with superior cabin comfort, will greatly contribute to meet our ambitious growth plans." "The 15 percent fuel savings and the widest cabin in its class give Turkish Airlines a big competitive advantage," said Airbus COO of Customers John Leahy.
Turkish Airlines already operates 75 A320 family aircraft. The new order will help Turkish Airlines expand their short- to medium-haul routes from its Istanbul hub as the aircraft's commonality with the existing Airbus fleet will generate additional cost savings. Incorporating new engines and large Sharklet wing tip devices, the expanded A320 fleet will deliver fuel savings of 15 percent, provide a double-digit reduction in nitric oxide emissions and reduced engine noise.