Airbus confident in supplier's plans to fix engine delays
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A flight test engineer holds an Airbus Group flag after the first flight of the Airbus A320neo (New Engine Option) in Colomiers near Toulouse, France, September 25, 2014. REUTERS/Regis Duvignau/File Photo
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(Reuters) - The commercial aircraft unit of Airbus Group SE (NYSE: AIR) is confident in plans from engine maker Pratt & Whitney to solve production delays for its next-generation single-aisle planes, the A320neo, Chief Operating Officer for Customers John Leahy said Thursday.
"It is disappointing the situation we find ourselves in. But it’s a good engine for everything we can see. They have some production difficulties that they’re working their way through," Leahy told reporters in New York after a gathering of aviation executives and analysts known as the Wings Club.
United Technologies Corp (NYSE: UTX) said earlier this month it would deliver 150 of its Pratt & Whitney engines this year, missing its target of 200 and pressuring cash flow.
Separately, Leahy dismissed doubts over demand for the world's largest passenger plane, the double-decker A380, after Airbus lowered production targets in July.
"Every 15 years, the industry is doubling in size," Leahy said. "So here you have London Heathrow, totally congested. JFK, congested. Los Angeles, congested. Hong Kong, congested. How are we going to double the traffic flows in the next 15 years if we don't use larger aircraft like the A380?”
Despite that longer-term optimism, Airbus now is lacking in new orders for the A380. In 2018, the company plans to cut the A380's delivery target to 12 a year from 27 in 2015 and about half what is projected for this year, to prevent a glut of unsold planes. Singapore Airlines Ltd (NASDAQ: SIAL) said this month it will not extend a lease on one of aircraft.
(Reporting By Jeffrey Dastin in New York; Editing by Chizu Nomiyama and David Gregorio)
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