Airbus Says It Will Deliver Despite Engine Delays

LONDON—Airbus Group SE said it still expected to meet full-year delivery targets days after engine supplier United Technologies Corp. warned it would fall short of plans.

"We confirm our 2016 delivery guidance of at least 650 aircraft," an Airbus spokesman said via email on Monday.

United Technologies Chief Executive Gregory Hayes told investors on Friday that the company's Pratt & Whitney aircraft engine unit is likely to ship only 150 of its newest family of commercial jet engines, known as the geared turbofan. It previously targeted about 200 deliveries this year.

Managing suppliers has become a major challenge for Airbus and rival Boeing as they boost output of some of their most popular jets after years of strong demand. Airbus also is running behind in delivering its A350 long-range jet after French cabin equipment provider Zodiac Aerospace SA fell behind in the production of some components.

Airbus uses the Pratt & Whitney engine to power its new A320neo narrow-body. Deliveries of those began this year amid delays related to the Pratt engine. A joint venture of General Electric Co. and Safran SA offers a rival engine for the plane.

Jefferies analyst Sandy Morris in a note Monday said the engine situation could affect delivery of about 12 A320neo planes. Early planes sold usually come with big discounts, limiting the financial loss to Airbus from lower deliveries, he said.

Airbus said it would meet its delivery target by delivering more of the older version of the A320 single-aisle plane.

Europe's aircraft maker said it has delivered 19 A320neo jetliners so far— 15 using the Pratt & Whitney engine whose development was six months ahead of that of the rival design.

Airbus said Pratt & Whitney was addressing early flaws with the engine, which was otherwise meeting performance targets.

Canadian plane maker Bombardier Inc. this month cut its 2016 delivery guidance for its new CSeries aircraft to seven planes from 15. The CSeries exclusively uses the Pratt & Whitney engine, which Bombardier blamed for its change in plan. Pratt still hopes to deliver 400 of the new engines next year. The company says it will churn out more than 1,000 of the engines by 2020, part of an effort to attack a backlog that now includes some 8,200 engine orders and options.

Write to Robert Wall at [e-mail]

(END) Dow Jones Newswires

September 19, 2016 05:25 ET (09:25 GMT)

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