Energy costs leading small suppliers to idle plants: Airbus

Bloomberg

Airbus SE Chief Executive Officer Guillaume Faury said high energy prices are weighing hard on suppliers to its jetliner programs and that some smaller firms are having to idle production.
While the worst of a supplier crunch triggered by shortages of labour and raw materials may be over, the high cost of power has become a pressing issue for players lower down the chain, Faury said in comments at the UK Aviation Club. It’s another challenge for the manufacturer at a time when Airbus has been seeking to crank up output.
“We see another thing coming, which is the consequences of energy prices skyrocketing leading to some suppliers trying to adapt, sometimes stop producing, waiting for the situation to normalise,” he said. “That’s very low in the supply chain, but it’s probably something new.”
Faury acknowledged that Airbus’s supplier base wasn’t as prepared as it might have been as the group sought to bounce back from the Covid-19 pandemic. At the same time, he said, a goal of producing 75 A320-series planes a month by 2025
remains “likely to happen.”
When asked how the UK’s current economic and market turmoil, which has hit the value of the pound, is affecting Airbus, Faury said the company is well hedged and so is not exposed. The CEO said the jetmaker is happy with the support it’s receiving in the UK and that wing production for all of its models will remain
focused there.
While the Toulouse, France-based group had viewed Brexit as a risk to its British connections, the situation now is positive, with the UK valued for its “innovative, fast ecosystem,”
he said.
The planemaker delivered 55 aircraft, up from 39 in August, it said, confirming a Bloomberg report. That takes the net tally to 435, meaning it must ship an average 88 per month to hit the annual target of 700.
Airbus is clinging to the goal even as labour and raw-material shortages at suppliers make boosting production tougher. While a year-end push is far from unusual, the scale of this year’s challenge stands out, with Faury saying last month that hitting 700 jets leaves “a hell of a lot of work to be done.”