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ZC - Zodiac Aerospace SA News Story

€24.83 0.0  0.0%

Last Trade - 16/03/18

Micro Cap
Market Cap £n/a
Enterprise Value £n/a
Revenue £4.29bn
Position in Universe th / 865

UPDATE 1-Airbus says supplier bottlenecks easing as deliveries rise

Fri 19th January, 2018 7:38am
* Airbus says cabin supplier Zodiac has addressed quality 
    * Backlog in A320neos should be cleared by mid 2018 
    * Emirates A380 order allows "efficient" production rate 
 (Adds new quotes from Airbus executive, details) 
    By Tim Hepher 
    NANTES, France, Jan 19 (Reuters) - Key suppliers to Airbus 
 AIR.PA  are overcoming problems blamed for delays in deliveries 
of passenger jets, allowing the European planemaker to resume 
increases in planned production for its newest models, a senior 
Airbus executive said. 
    Seats and cabins supplier Zodiac Aerospace  ZODC.PA  is 
running smoothly after an industrial crisis that delayed Airbus 
A350 deliveries in 2016, Airbus Programmes Head Didier Evrard 
told reporters. 
    "In 2017 we had very few problems: Zodiac considerably 
improved its operational performance, as did other suppliers. 
This main reason for the blockage was resolved," Evrard told 
    Zodiac, which is in the midst of being taken over by 
France's Safran  SAF.PA  after repeated delays and profit 
warnings, broadly addressed problems of quantity in the first 
half of 2017 and quality during the second half, he said.  
    A separate backlog of about 30 undelivered A320neo-family 
jets, which have been parked in Toulouse and Hamburg waiting for 
engines, should be cleared by mid-year, he added. 
    The French engineer and former missile maker also hailed a 
provisional order for at least 20 A380 superjumbos by Emirates, 
handing a reprieve to the world's largest airliner after poor 
    Airbus is expected to halve production of the double-deck 
plane to six a year as part of the deal, which Airbus hopes will 
set a floor production level that will allow it to shop for more 
sales. But many aerospace analysts question whether it will make 
money at that rate. 
    Asked about the breakeven production level, Evrard said, "I 
won't say it is 6 (a year). I don't say it is profitable or not 
profitable, but consider it an efficient rate."  
    Airbus plans to produce 12 A380s this year and eight in 
2019. The company has not yet formally decided to cut output 
below eight, he added. 
    Airbus has made significant changes to the production line 
allowing it to cut A380 costs, including reducing factory space 
and fewer assembly stations, Evrard told journalists visiting a 
fuselage parts factory in western France. 
    Evrard said Airbus  AIR.PA  was in no hurry to decide 
whether to bring production of nacelles for LEAP engines 
in-house, matching a previous decision to take over similar work 
carried out by Pratt & Whitney  UTX.N  on its own engines.  
    Airbus, which has been in talks with France's Safran 
 SAF.PA  about reallocating the work for several months, 
nonetheless believes it has contractual freedom to act if it 
decides to go ahead with the possible transfer, he added. 
    The talks are seen as the latest example of manufacturers 
vying to take over high-value work carried out by suppliers in 
order to boost margins or get hold of specific technology. 
 (Reporting by Tim Hepher; Editing by Richard Lough) 
 ((tim.hepher@thomsonreuters.com; +33 1 49 49 54 52; Reuters 
Messaging: tim.hepher.thomsonreuters@reuters.net)) 
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