Airbus sees supply progress, Spirit deal to close in fourth quarter

By Tim Hepher

PARIS, Oct 13 (Reuters) - Airbus AIR.PA has seen a marked improvement in confidence and performance from its suppliers, all of whom are ready to support the company's target of increasing deliveries by 7% to some 820 jets this year, a senior company official said on Monday.

The European planemaker is also on its way towards a longer-term goal of increasing underlying output of narrow-body jets to 75 a month in 2027, Florent Massou dit Labaquere, executive vice-president for operations, told reporters.

Massou was speaking as the world's largest planemaker prepared to inaugurate a second U.S. assembly line for A320neo-family jets in Mobile, Alabama, later on Monday. Airbus also plans a similar expansion in China in coming weeks.

He said the expanded network of 10 assembly lines would be sufficient to meet production targets, despite a shift in demand toward the larger A321neo, which requires more time to build.

In 2021, Airbus set out plans to almost double output of narrow-body jets from 40 a month to 75 by 2025. It has kept the target but gradually pushed the date back by two years due to industry-wide bottlenecks and delays.

Industry sources have said Airbus struggled over that time to persuade some suppliers to step up investments for plans that may not materialise, as targets were repeatedly extended.

But Massou indicated suppliers were more upbeat.

"I've seen a completely different picture with a lot of suppliers that understand where we are, that witness the stability we had in terms of planning for the last few months," he said.

Massou said Airbus aims to complete the carve-up with Boeing BA.N of supplier Spirit AeroSystems SPR.N by the end of the year. "The deal is progressing; we expect to close in Q4," he told reporters.

The production comments echo those of a Boeing official who last week told a conference that supply chains had stabilised.

"The fact that this year we've been executing to our plan, and maybe in some cases exceeding it, gives our suppliers the confidence they need to invest in their own businesses," marketing vice-president Darren Hulst told the International Society of Transport Aircraft Trading (ISTAT).

Suppliers say Airbus is currently producing at 63 planes a month, partially by absorbing inventory. "The nervousness will be what happens towards year-end," a senior supplier said.