Airbus set to reduce aircraft inventory by the end of the year

Airbus is not issuing a forecast for 2020 deliveries of aircraft produced or deliveries that can no longer be collected by the customer, but senior executives have expressed confidence that the company would still be able to clear most of its inventory by the end of this year

Airbus CEO Guillaume Faury said the company would “significantly” reduce inventory by the end of the year thanks to mainly what he called convergence of production deliveries.

“Our objective is to get rid of the vast majority of the inventory by the end of the year,” he said. Faury declined to give guidance on the year-end number of undelivered aircraft because of uncertainty around COVID-19 and “the number of airlines with whom we keep adapting the situation to their needs and their own situation.” The “very vast majority” of aircraft remain undelivered for just a couple of months, he added, “though there are a fewer number of cases where the situation is critical and where we are preparing ourselves to store the aircraft for a longer time.”

Airbus believes that the widebody market will take longer to recover than the single-aisle segment, and revealed that it will reduce the monthly output of its A350, from six aircraft to five. It also believes that its rate of 40 A320s per month provides for the right balance between supply and demand. “There might be some small adjustment, but we will keep it for the second half of 2020 and entering into 2021,” said Faury, adding that a production ramp-up of the single-aisle “potentially could start in the second half of 2021, and it is very likely it will happen in 2022.”

Faury believes that aviation will remain a strong-business and: “We will see again a very strong demand when demand recovers,” he said though he cautioned that air transport may not recover completely until 2023 or 2025.