Why is Airbus further increasing its long-term A350 production rate?

Hello All,

Airbus announced that it would increase its A350 production rate to 12 per month by the end of 2028. In this blog post we analyze the rationale for the European OEM’s decision.

At face value capitalizing on the other guy’s woes

Boeing has had a challenging 2024 so far. While Airbus is not immune from supply chain issues, the Boeing 737 line is running well below its envisioned production rate. The 787 line is dealing with supply chain issues, preventing from increasing production rates as envisioned. The 777X certification will likely take longer than envisioned.

A February post showed that Boeing’s passenger twin-aisle production lines are well filled, with slots challenging to find this decade. The recent production delays make the matter worse.

A similar Airbus post showed that there are more twin-aisle slots available on the A330neo and A350 lines. There are 2027 slots for the A330neo and likely in 2028 for the A350. The announced production increase allows Airbus to accommodate airlines’ demand for later this decade.

Airbus’ fewer production and certification woes also mean that airlines are more confident (than Boeing) that they will receive their aircraft without excessive delays.

Lingering twin-aisle production challenges

An earlier post this year showed that passenger twin-aisle deliveries (166) were around 2010 levels (160), well below the 2015 “bubble” peak (362). The supply chain issues and resulting delivery delays mean that airlines are keeping their older aircraft around for much longer than desired.

The production ramp-up will be slow. Airbus’ envisioned plan to go from the current effective five per month to 12 in 5 years is ambitious but realistic. It is hard for twin-aisle programs to increase production by more than 2 monthly units per year.

To compensate for the lack of current aircraft deliveries, airlines will want more later this decade, once supply chains are (hopefully) in healthier conditions. Expect then an uptick in older-generation aircraft retirements, notably 777-200ERs, A330ceos, and 767-300ERs (for Delta and United).

While the 12 per month figure per month is higher than the envisioned long-term Dreamliner production rate (10/month), this blog believes it is viable for the following reasons:

• As mentioned previously, airlines have significantly deferred aircraft retirements. This aircraft shortage situation would have seemed unthinkable three years ago during the Covid-19 pandemic.
• Accounting for the A350F, passenger deliveries will be at most 1 more monthly unit than before the pandemic, when the A350 line was producing 10 per month. The A330 was at five per month before Covid-19 so the total envisioned passenger aircraft production rate is flat (1 unit from the A330neo to the A350), even excluding the A380.
• The 787 line was at 14 per month in 2019.

Catching Boeing’s twin-aisle market share lead?

The announced long-term twin-aisle production rates give Airbus a small lead over Boeing: 16 (12 A350s and 4 A330s) vs. 15 (10 787s and 5 777s). While the European OEM comprehensively leads the American one in the single-aisle market, Boeing still has the edge for twin-aisle in-service aircraft and order books.

Airbus only had more twin-aisle deliveries than Boeing over the 2004-2011 period, coincidentally during the Dreamliner development. The numbers were close in 2021 and 2022 when Dreamliner production was all but stopped. Boeing’s larger footprint in the freighter and military markets has allowed it to keep the lead in twin-aisle deliveries.

Airbus leads Boeing in passenger twin-aisle aircraft deliveries since 2020 (see below). The latest production ramp-up announcement shows that the European OEM intends to keep it.