UPDATE 2-Airbus revives plan for new single-aisle jet plant in Toulouse

·2 min read

(Adds number of jobs, robot technology, A321XLR flexibility)

By Tim Hepher

PARIS, May 12 (Reuters) - Airbus has revived plans for a new production line for its A321neo jet in Toulouse, France, as it reshapes production of the medium-haul single-aisle jets that it hopes will lead its factories out of the coronavirus crisis.

The European planemaker said on Wednesday the new line, to be installed in the deserted assembly hall where it once built the now-abandoned A380 superjumbo, would open by end-2022.

Airbus decided in 2019 to halt output of the world's largest jetliner and the last A380 rolled out in March, leaving the world's second-largest industrial building in limbo.

Airbus plans to use part of the Jean-Luc Lagardere building to add a new line with state-of-the art facilities to meet demand for the smaller A321neo, which has seen a rise in demand to represent more than half of its single-aisle backlog.

That will replace one of the original lines used for the A320, a slightly smaller and earlier model, in Toulouse.

Airbus suspended similar plans in April last year when the outbreak of COVID-19 forced it to cut global production, angering French unions who called for the plan to stay intact.

The relaunch comes as Airbus tells suppliers to be ready for a further recovery in single-aisle output to 53 jets a month by end-2022, first reported by Reuters on Tuesday.

Toulouse, where Airbus is headquartered, is one of four sites used worldwide to assemble its single-aisle planes.

Currently only its lines in Hamburg, Germany, and Mobile in Alabama are equipped to make the A321neo, which has a dominant share of sales against large versions of Boeing's 737 MAX.

The new facility will also be able to handle production of the A320neo sister model, whose sales are more balanced against the competing Boeing 737 MAX 8, as well as the newest A321XLR variant which Airbus also plans to assemble in Hamburg.

The two planemakers have clashed over where the centre of the market is for such types of planes, but are increasingly involved in a contest over production strategy as they seek to deliver on bulging order books for single-aisle aircraft.

The new Toulouse line will employ 500 people and deploy robots introduced at the latest of four lines in Hamburg, despite teething problems with the new production technology.

Airbus said it aimed to return to pre-crisis single-aisle production between 2023 and 2025. Before the pandemic, its factories were running at a record 60 single-aisles a month.

Jefferies analyst Sandy Morris said Airbus could regain output of 57 single-aisle jets a month in 2024. (Reporting by Tim Hepher; Editing by Jason Neely and Alexander Smith)

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