Airbus on the supplier warpath

The normally uber cool Airbus president and CEO, Fabrice Bregier, is losing patience with delinquent suppliers as delays hold up A350 deliveries to its customers.

by TOM BALLANTYNE FROM HAMBURG  

July 1st 2016

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When it comes to A350 seats and bathrooms, Airbus boss, Fabrice Bregier has a big problem – several of the groundbreaking jet’s suppliers. Read More »

In a year when the Toulouse headquartered manufacturer is supposed to deliver 50 A350s to airlines around the world, nine had made it to their customers at press time.

The airplane manufacturer has sold 804 of its new A350 XWB jet, but only delivered 24 to date (at press time).

Airbus bosses Didier Evrard, Tom Williams and Fabrice Bregier: Airbus making production changes that will deliver a “a much higher level” of A350 output in 2016

Speaking at the manufacturer’s 2016 Innovation Days, Bregier said: “Our customers, when they fly long range, expect to have toilets with doors that close.’” And many of them did not. “I was not satisfied. I was upset,” he said.

“I joined Airbus almost 10 years ago and we started this new A350 development in early 2007. We went through tons of difficulties. We put together thousands of complex parts to assemble this aircraft and now we are blocked because seats or toilets are not ready or the quality is poor.

“It’s a bit like getting your new car, but you have something missing that does not allow you to drive it.

“Everything is there except for the seat. This is frustrating, but this is our responsibility to make it work with the suppliers.”

Bregier said cabin suppliers are very good at marketing. They are not only ramping up work for Airbus and Boeing, but for their own retrofit businesses.

“But they are understaffed in manufacturing and engineering and in the quality of their program and supply chain management.

“They just cannot continue like this. This is the message and I will constantly repeat it very vocally: “I will progressively get rid of delinquent suppliers who are not meeting the standards of our customers.”

In other words, Brégier warned that suppliers who continue to fail at delivery milestones could see themselves not only removed from the supplier furnished equipment (SFE) catalogue, but potentially blocked from working with Airbus.

When Taiwan’s China Airlines (CAL) announced last month that Airbus had to revise its delivery schedule for its first A350 from July to September, it was the latest delay in what has become a huge headache for the European plane maker.

CAL has 14 of the aircraft type on order and was due to receive four this year, six in 2017 and the final four in 2018.

And the flag carrier is not alone in waiting longer than expected for the jets planned by airline customers to bring huge savings in fuel costs and overall economics to their operations.

Thai Airways International was supposed to receive the first of eight A350s in July, but its delivery has been pushed back to August. Cathay Pacific Airways was in line to accept the first of the 48 A350s it has ordered earlier this year, but it did not take delivery until late May. It expects another nine at its Hong Kong headquarters by year end.

A spokesperson for Cathay Pacific told Orient Aviation the carrier was targeting delivery of 22 A350-900s in 2016 and 2017. “It is our normal practice to build some flexibility into our annual aircraft delivery schedules to take into account different and unforeseen scenarios,” she said.

“The Cathay Pacific team is working very closely with our cabin suppliers and Airbus to protect the integrity of the delivery program to ensure our A350-900 aircraft are delivered according to schedule.”

And the A350 delays are not the only production and delivery issues the company is facing.

Problems with the engines for its new A320neo have forced the postponement of the aircraft to its initial customers. Delays caused by teething problems with the Pratt & Whitney’s PW-1100G engines, said Airbus chief operating officer, Tom Williams, ruefully, has meant the company has effectively been building A320neo “gliders”.

Bregier said in Hamburg that production will ramp up on both the A350 and the A320neo and delivery targets could still be met.

Can Airbus achieve its target of 50 deliveries this year? Executive vice president and head of programs, Didier Evrard, said yes it can, but conceded the delay issues were placing “additional stresses on the system”, in a manufacturing environment already stressed by an aggressive delivery timeline.

“The 50 (A350) aircraft: we have challenges for that,” he said. “I am really disturbed by the lack of cabin equipment. Cathay Pacific’s seats are being delayed. We have the same issue with other operators as well.

“Whether it was seats in the catalogue or it was seats chosen by the customer themselves, it was no different. That was a big crisis. And we have issues with other cabin suppliers so [it has been] a very, very difficult beginning of the year.”

There had been some improvements in the last three months, he said, but they had come at a price. “We have to mobilize additional Station 20 (final assembly line positions) where we put the cabin in the aircraft,” he said.

“We are lucky that this year the A330 is going down so this frees up additional Station 20s that we can use for the A350.

“A number of additional changes are necessary to meet the targets. “What we are putting together today is a strong summer plan to allow us to reach a much higher level of throughput in the second half of the year.

“We are where we are. Fixes are in place: additional capacity of workmanship, hangars and stations. The target remains absolutely achievable, but it will come with a very high level of effort from the A350 team and industrial systems to enable that because the level of disruption we have seen with these cabin problems is very high.”

As for the A320neo “gliders”, Williams said new standard Pratt & Whitney PW1100G engines are about to arrive at the Airbus Final Assembly Lines in Hamburg and Toulouse, so deliveries [of the A320neo] will resume.

“The aircraft are parked, finished, painted and ready to go. All they need is engines,” he said. Pratt & Whitney has developed software upgrades and a hardware fix that reduces the problem of cooling time during engine startup.

The manufacturer wants to limit the delay to 90 seconds per engine in the short term and to 30 seconds by the end of the year. For now, only Lufthansa and IndiGo have taken delivery of the new variant - a total of six aircraft.

Querulous Qatar Airways has refused to accept the aircraft until the fix is completed. It cancelled the delivery of its first A320neo. Qatar Airways group chief executive, Akbar Al Baker, said months of delays to the single aisle plane allowed the Doha-based airline to invoke a cancellation clause with Airbus.

Al Baker has intimated that his airline, the one-time launch customer for the A320neo, could walk away from more orders when contracts permitted.

Qatar has ordered 50 A320neo-family planes and was due to receive the first of the type last year. Al Baker said that under the original agreement the airline should have had five A320neos in service by now.

“It is making a huge impact on my bottom line. We are, quite frankly, screaming,” he said.

Pratt & Whitney took the unusual step of publicly rebuking a customer when it said Al Baker’s comments were “completely inaccurate” and that they “mischaracterize the performance of the engine”.

The engine maker said it is meeting its fuel-consumption promises and has “resolved the very few initial teething items airlines have experienced” and that information about its “solutions for the items are well known” and widely disseminated to its customers.

Pratt & Whitney is now delivering production engines to Airbus with changes, but they have yet to be flight-tested.

Brégier said “mature aircraft” would be ready by mid-year and that Airbus aimed to meet its delivery commitment, but acknowledged “it will be challenging”.

At the end of last month, Airbus finally had some good news. On May 31, it received joint type certification of the CFM Leap-1A-powered version of the A320neo. The variant is to be delivered in July or August to an as yet undisclosed customer.