Airbus has announced that they will cut production of the A330. The company released a statement sharing that news publicly and also shared their reasons for making this move. Additionally, Airbus revealed how this production cut will affect the rest of their business, as they move forward.
In 2017, Airbus produced 69 A330 models, but they plan to cut that number down to 50 by 2019. The cut comes in response to fewer orders for the CEO and NEO models. Additionally, Airbus is increasing the rate for the A320 program, hoping that will keep them from having to further cut the rate for the A330.
Even though Airbus expected lower returns in the most recent quarter as a result of fewer deliveries, the company made a preemptive move to cut production of the A330. As early as 2015, the company shared that it would decrease the planned production of 9 model A330s per month, dropping that number down to six each month. Over time, Airbus has been switching from their current engine option (ceo) to their newer neo variant, a move that may have contributed to the need to make production cuts. Since the the switch was instituted over a longer period of time, the overall production of various models has been affected. Specifically, the combined production means Airbus will have limited resources to produce as many A330neo models.
There may be a twist of irony in the fact that, after those production cuts were announced, the company experienced an increase in A330ceo orders. The uptick in interest in the model may have been the result of a lower rate in combination with a sudden drop in fuel prices. For a short period, Airbus considered bumping production back up to 7 per month, but, ultimately, it was decided that the renewed interest in the model wasn’t strong enough to warrant that decision.
The situation at Airbus has created a 4-year backlog in the production of the A330neo. In the meantime, the company is relying on the production of the A330ceo to help fill the delivery slots left open by the backlog. Unless Airbus can generate more interest in the A330neo in the near future, they may be forced to decrease production rates again. Unfortunately, the A330ceo is just not making an appeal to customers interested in the A330neo model.