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UPDATE 1-Airbus sales chief sees some export credit cover in 2017
March 6, 2017 / 11:05 PM / 7 months ago

UPDATE 1-Airbus sales chief sees some export credit cover in 2017

(Adds comments from sales chief)

SAN DIEGO, March 6 (Reuters) - Airbus expects to have access to some European export credit financing on a “case by case” basis in 2017, its sales chief said on Monday.

European Export Credit agencies (ECA) suspended financing for Airbus deliveries in 2016 amid a UK investigation into the use of sales agents.

“I would be expecting that we will get ECA cover on a case-by-case basis this year,” John Leahy, chief operating officer for customers said in an interview.

Speaking on the sidelines of the ISTAT Americas air finance conference, Leahy said Airbus would need until at least 2018 until it recoups production levels it had originally planned for its A320neo jetliner following production problems at engine supplier Pratt & Whitney.

“I think Pratt has been frustrating. We are certainly capable of delivering the airframes the moment we have engines. The good news is the engine is meeting and exceeding our expectations,” Leahy told Reuters.

Airbus delivered 68 A320neos in 2016, well below earlier expectations, and predicts it will treble this number in 2017.

Leahy confirmed the overhang of late deliveries caused by missing engines would persist into 2018.

“We will still be cumulatively behind by the end of 2017 but we will still be in the process of catching up. We can always hope that they will do more, but at this point their track record isn’t that impressive.”

Airbus also saw profit margins fall last year despite higher deliveries and lower spending on research and development.

That partly reflected high early production costs for its A350. But profits have also been squeezed by lower pricing for an earlier version of A350, which was relaunched in 2006 with a bolder design and higher price tag.

Analysts say some of the airlines taking A350s are those such as Finnair which had ordered the earlier version and were granted permission to change to the new design at the same price. In all, Airbus sold more than 100 of the earlier version, a derivative of its A330, before opting for an all-new design.

“We did honour some firm contracts that people had for the original airplanes,” Leahy told Reuters, asked about the impact of the pricing switch, adding: “We are almost through it”.

Airbus is also still studying a possible larger A350-2000 version, but is in no hurry to decide, Leahy said.

“We are studying it but this market right now is soft for wide-bodies, so I don’t see a big queue of customers saying I want to launch a new programme ... We have time to study it.” (Reporting by Tim Hepher; Editing by Bernard Orr)

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