Viewpoint

More on Mobile

Chris Kjelgaard visited Mobile, Alabama for the inauguration of Airbus’ new A320-family final assembly line on September 14. He provides additional perspective on this bold Airbus move.

Much has been made this week by US and European media – including Talking Point – about the inauguration by Airbus of its first commercial-aircraft assembly line in the United States. Finally, Boeing has some serious competition in its own back yard.

One ironic potential result of Airbus producing commercial aircraft in the USA made a particular splash in UK newspapers: the fact that Mobile-assembled A320-family jets would theoretically be eligible for export credit guarantee support from the US ExImBank.

Allan McArtor, chairman of Airbus Group, the holding company for all of Airbus’ US operations, confirmed this to the aviation correspondent of a major British newspaper.

The possibility of ExImBank providing financial support for Airbus aircraft may be enough to give many US politicians apoplexy. It certainly provides ammunition for those in the US Congress who wish to see ExImBank die.

ExImBank’s charter was not renewed before Congress broke up for its summer recess and the Republican/Tea Party politicians who made sure that happened will now use the unusual possibility of Airbus receiving ExIm assistance to try to ensure the US export credit agency never again signs a new loan guarantee.

However, in practice it is extremely unlikely that any Airbus jet assembled at the new Airbus U.S. Manufacturing Facility in Mobile would actually be eligible for ExIm financing aid. That’s because Fabrice Brégier, the president and CEO of Airbus, made it very clear on the evening before the company officially opened the new line that every A320-family jet which rolls off the Mobile line will be destined for a US customer.

During a well-attended press conference on September 13, I asked Brégier if any aircraft assembled on the Mobile line would go to any one of Airbus’ many A320-family customers in Mexico and Latin America, or anywhere else for that matter.

Brégier unequivocally answered ‘No’, explaining that Airbus expects to sell more than 100 A320-family jets a year to the US market over the next 20 years, with the aim of winning a 40 per cent share of that market category in the world’s second-largest single-country market.

If it succeeds in doing so, the US market will “swallow” the entire amount of A320-family jets produced by the Mobile line every year, according to Brégier – even if Airbus pushes ahead with its longer-term plan to double the size of its existing 116-acre site, to increase production from its initial 50-aircraft annual maximum to 100 aircraft a year.

Airbus sees a growth and replacement market existing in the USA for some 4,700 single-aisle jets in the A320 family’s size category over the next 20 years. For Airbus to win the 40 per cent market share it is targeting, it would need to sell 1,880 aircraft to US customers over the two decades – an average annual sales rate of 94 aircraft.

Barry Eccleston, president and CEO of Airbus Americas, Airbus’ commercial-aircraft company in the USA, said Airbus is already winning a 40 per cent share of new orders for larger single-aisle jets in the continent-sized country, though its market penetration there in terms of already-operated aircraft is just 20 per cent.

Eccleston also said that, right after one new US customer for A320-family jets signed a purchase contract with Airbus, the customer told the manufacturer it wanted all its aircraft to come from the Mobile line.

This may be an indicator of things to come for Airbus in the USA. McArtor noted that various Asian car manufacturers had noticed “a significant bounce” in their US sales when they started manufacturing cars in factories located in America.

Airbus sees no reason why it shouldn’t see a similar bounce – all the more so because it is convinced almost all of the aircraft it assembles on the Mobile line will be A321s and A321neos, models for which Boeing offers no single-aisle equivalent in terms of passenger capacity.

Over the next 20 years, the US air transport market will grow at an average rate of 2.4 per cent a year, and 90 per cent of the growth will come from existing routes, according to Eccleston, citing Airbus’ new Global Market Forecast 2015-2034.

This argues that US airlines will need larger aircraft than they now operate – for instance, A321s rather than A320s. Airbus’ initial experience with its Mobile line supports this assertion: 49 out of the first 50 aircraft to be assembled will be A321s.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish