Aerospace & Defense

Airbus increases production of US-made planes as tariffs threaten prices for customers

Key Points
  • Airbus will increase U.S. production of narrowbody jetliners from five to seven a month by the end of the year.
  • The company is racing to meet searing demand for the planes after production delays.
  • The A320 planes are made in its Mobile, Ala. plant.
An Airbus SE A321 plane fuselage is lifted with a crane at the company's final assembly line facility in Mobile, Alabama
Luke Sharrett | Bloomberg | Getty Images

Airbus said Thursday that it will ramp up production of U.S.-made A320 narrow-body jetliners at its Mobile, Ala. plant to seven a month by the start of 2021, from five a month currently, a move that comes after tariffs on Europe-made planes threatened to drive up costs for U.S. customers who have purchased planes from the European manufacturer.

The decision also comes after Airbus overtook chief rival Boeing as the world's biggest aircraft manufacturer as the U.S. company was hobbled by the crisis surrounding the still-grounded 737 Max after two fatal crashes. 

Airbus is also scrambling to keep up with strong demand, which was a key driver in ramping up production, a spokeswoman said. Big customers like JetBlue Airways have faced delivery delays for their Airbus A320 jets as a result of the factory problems.

The increase at the Mobile plant would bring Airbus' A320-family production across its four production plants to a rate of 63 a month in 2021. That, in addition to new jobs for its production plans for the A220 — a smaller narrowbody plane — at the Mobile factory would total 275 additional jobs over the next year, the company said.

The U.S. government said in October that it would implement tariffs on Airbus planes after the WTO sided with the U.S. in 15-year-old dispute over European government subsidies to Airbus.

Both Airbus and Boeing have large backlogs that extend to the middle of the next decade for their single-aisle jets, planes that are used on short- and medium-haul flights, but Boeing halted deliveries of the planes after the second of two fatal crashes last March prompted regulators to ground the planes. Boeing this month plans to suspend production of the planes as the grounding drags on far longer than initially expected.

Airbus had a backlog of more than 6,660 narrowbody planes as of the end of November. 

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