Airbus to Cut Production Rates as Demand from Airlines Plummets

Airbus will cut production across its aircraft line amid plummeting demand for air travel amidst the  coronavirus outbreak.

In the first quarter of the year, Airbus booked 290 net orders and delivered 122 aircraft. However, it was forced to store an additional 60 aircraft it built but did not deliver, according to a company statement issued on Wednesday. The company cited both requests from airlines to defer deliveries and other, unidentified factors related to the current pandemic.

Due to lower demand from customers, Airbus says it will cut production on several programs for the remainder of the year. It is cutting the A320 rate to 40 aircraft per month, down from an average of over 53 aircraft per month in 2019.

It will produce the A330 at a rate of two per month, and the A350 at a rate of six per month. It did not announce a rate cut for the A220 family or the A380, but we expect Airbus to eventually reduce production of both models this year. Airbus may terminate production of the A380 altogether if Emirates cancels its remaining nine orders.

Our forecasts for Airbus’ product line have been updated in the Platinum Forecast System. We expect the new production rates will last through 2021 and that Airbus will begin increasing production in 2022. However, this forecast is speculative given the current uncertainty over how quickly passenger demand will recover after the coronavirus pandemic abates and how quickly the global economy recovers.