Airbus exec sees no Boeing strike impact but frets over CFM, Spirit

By Tim Hepher

PARIS (Reuters) - The CEO of Airbus' (PA:AIR ) planemaking business said on Friday the European planemaker was monitoring the wider impact of a strike by Boeing (NYSE:BA ) workers, but had not yet seen a direct impact on the number of parts delivered by shared suppliers.

In a briefing to French aerospace media, Christian Scherer singled out an earlier issue with supplies of engines from CFM International and said these remained on the "critical path," adding: "I regret it, but it is the case".

A spokesperson for the French-U.S. engine maker declined comment.

"CFM is a bottleneck," Scherer told a briefing hosted by French aerospace journalists' association AJPAE.

Airbus lowered industrial targets and issued a profit warning in July, citing a shortfall in supplies of engines from CFM, co-owned by GE Aerospace and France's Safran (EPA:SAF ), as well as shortages of parts from other suppliers.

GE Aerospace CFO Rahul Ghai told a Jefferies conference last month that third-quarter engine output would be better than in the second quarter, "but still (show) pressure on a year-over-year basis".

He expected further improvement in the fourth quarter.

Scherer also singled out production problems at Spirit AeroSystems (NYSE:SPR ).

Production rates at the U.S. aerostructures supplier are "not exactly where we would like," Scherer said, adding that Airbus had sent dozens of workers to key Spirit factories to help stabilise the situation.

Reuters reported on Thursday that Airbus was facing concerns over production of key structural parts for A350 and A220 jets by Spirit AeroSystems, and had taken measures including deploying staff to affected plants and air-freighting parts.

Spirit said it was delivering according to Airbus' schedule and that Airbus staff were part of an existing joint improvement program, and did not indicate new or urgent production issues.

In a sign of buoyant demand for wide-demand jets,



Scherer hinted at increased production of the A330neo. Production of the upgraded model is running at about four a month but will not necessarily stay at that level, he said.

A possible stretched version of the A220 remains on the table, he said, in answer to a query about plans that have long been mooted to add capacity to the Canadian-designed model. Industry sources say engine makers are sceptical about the plan, which could cannibalise sales of best-selling larger models.

Source: Investing.com