Airbus deliveries regain momentum after record August

September 6, 2016 10:29 AM EDT

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By Tim Hepher

PARIS (Reuters) - A surge in Airbus (NYSE: AIR) jet deliveries in August has put the European planemaker back on course to meet an annual target which had been threatened by delays in parts supplies, but analysts warned it can ill afford further disruption.

Airbus said it had delivered 61 jets in August, 30 percent more than its previous record for the traditionally quiet summer month, bringing the total for the year so far to 400 aircraft.

The European planemaker, whose deliveries had started the year below trend because of problems with supplies of engines and cabin parts, posted a sharp increase after putting workers on an overtime drive.

Its planemaking chief Fabrice Bregier, who anticipated the record deliveries in an interview with Reuters last week, told a French newspaper on Tuesday Airbus was confident of meeting its annual delivery goals.

August had been shaping up as a make-or-break month for full-year deliveries after earlier delays. The January-August period is traditionally a solid indicator of progress towards full-year deliveries, representing an average of 62 percent of the full-year total in the past five years.

At the current rate, Airbus is on course to deliver some 645 jets this year, needing a small extra kick to reach the 2016 target of 650, which underpins Airbus Group revenues.

Airbus Group shares rose one percent.

However some industry sources and analysts expressed caution about deliveries, noting Airbus remained vulnerable to problems with suppliers and internal pressures.

"They are not there yet," a senior industry source said.

August's increase, from the previous August peak of 47 in 2013, was mainly due to accelerated deliveries of the existing version of the Airbus A320, its best-selling model.

It is gradually being replaced by the upgraded A320neo, but deliveries of the newer model have been hampered by technical problems and delays with engines from Pratt & Whitney (NYSE: UTX).

On Tuesday, Canada's Bombardier slashed delivery forecasts for its new CSeries jet, citing delays in deliveries of a similar model of engine from Pratt & Whitney. Some industry sources said Airbus could also be partially affected.

Deliveries of the A320neo show signs of recovering, with 5 aircraft handed over in August or one more than the previous best month, but deliveries remain well behind the planemaker's original plans with up to 20 jets parked and awaiting engines.

Airbus said it had delivered 16 A320neo jets so far, 13 of them equipped with Pratt & Whitney engines and 3 with alternative powerplants from CFM (NYSE: GE)(NYSE: SAF).

It confirmed a sharp increase in deliveries of its long-haul A350 jet in August. It delivered six of the aircraft after delays in cabin fittings, but needs to push the average rate above 7 to meet a goal of 50 of the carbon-fiber planes in 2016.

With cabin suppliers like Zodiac Aerospace still struggling to iron out production problems, some analysts question how quickly Airbus will push the supply chain to higher rates as it prepares for 10 A350s a month by the end of 2018.

Airbus said it had booked 517 orders in the first eight months, including a 100-plane order from AirAsia held over from the previous month. After cancellations, Airbus had 438 net orders, putting it ahead of rival Boeing (NYSE: BA), though both are bracing for a drop in 2016 orders due to fragile economies.

(Editing by Alexander Smith/Ruth Pitchford)

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