Airbus on Friday unveiled plans to increase production of its popular A320 short -haul passenger jet in response to strong orders from airlines, but will lower output of its A330 long-haul aircraft because of weaker demand.

At its full-year results for 2014, the European aerospace group also recorded a new earnings charge of more than €500m against its troubled A400M military transport aircraft programme.

Airbus announced it would increase production of its profitable A320 family of narrow-body aircraft to 50 per month by 2017 — compared with 42 currently — in a move that is similar to output rises planned by Boeing, the US aerospace group. Both companies have been reporting strong demand for new versions of their short haul passenger jets featuring more fuel efficient engines, although many of the sales were notched up before the oil price started falling last summer.

Tom Enders, chief executive of Airbus group, said 2014 had been a “pretty good year for the company, despite some challenges internally and externally”.

Airbus — which is dominated by its passenger jet division — reported €4.1bn of earnings before interest, tax and one-off items for last year, up 15 per cent compared to 2013, as revenue rose 5 per cent to €60.7bn. Net income jumped 60 per cent to €2.3bn, partly because Airbus sold shares in Dassault Aviation.

The company plans to make a record dividend payment of €1.20 a share, up from €0.75 in 2013.

In a statement highlighting the potential for higher revenue at its passenger jet division this year, Airbus said it expected to record “slightly higher” deliveries of aircraft to customers in 2015 compared with 2014. It also reiterated that it should break even this year with its lossmaking A380 superjumbo programme, which has struggled to attract orders.

Shares in Airbus were up more than 7 per cent at €55.46 by early afternoon on Friday.

The company said it was lowering production of its wide-body A330 passenger jet to six per month from 2016 — compared with 10 currently — reflecting how it has limited orders for the profitable aircraft programme.

As with the A320 aircraft, Airbus is preparing to make a new version of the A330 featuring more fuel efficient engines.

The first A330neo — or new engine option — should be delivered to a customer in 2017. The first A320neo should be supplied at the end of this year.

These transitions to revamped versions of its A320 and A330 aircraft are among Airbus’ most delicate challenges, not least because of the development costs.

Airbus’ passenger jet division is also working on plans to increase production of its new A350 long haul passenger jet. The first A350 for commercial use was delivered to Qatar Airways last year.

Airbus is also focused on restructuring its defence and space division, which is grappling with cuts in military spending by western governments, and the threat posed by new entrants to the rocket industry, such as Elon Musk’s SpaceX.

The group recorded a charge of €551m because of delays to its €20bn A400M military transport aircraft programme.

In January, Mr Enders apologised for the delays, which prompted a management shake up, with Domingo Ureña-Raso, head of the military aircraft division, being replaced by Fernando Alonso, head of flight test operations.

“We are focused on tackling our various operational challenges, including the A350 and A400M ramp-up and costs,” said Mr Enders.

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