Airbus sets plan to boost output, igniting aerospace rally

Airbus sets plan to boost output, igniting aerospace rally

Airbus SE said it’s preparing to gear up production of its best-selling A320-series jets beyond prepandemic levels within two years, sending a jolt of optimism into an aviation sector primed for a global recovery.

Aerospace shares jumped in Europe and the U.S. after the world’s largest maker of commercial jetliners told suppliers to be ready to raise output of the narrowbody planes to a rate of 64 per month by the second quarter of 2023.

That figure could rise to 70 a month early the following year, with 75 a possibility by 2025, Airbus said in a statement Thursday. Reaching that level would almost double its current, pandemic-depressed output.

The ambitious plan stands out in an industry that’s still struggling to gain traction after COVID-19 wiped out demand for air travel. Despite short-term flare-ups in the pandemic, the longer-term picture has brightened with the global rollout of vaccines. Airbus and U.S. rival Boeing Co. have been showing more confidence as airlines ramp up schedules for shorter flights. Still, the industry faces its next challenge with pressure to lower carbon emissions.

“We think it is premature, but Airbus is the one with a constant dialogue with airline customers, and it has called things pretty well to date,” said Sandy Morris, an analyst with Jefferies. He said he’s concerned about further disruption from the pandemic and initiatives to cut emissions. “Nonetheless, Airbus will know all that too.”

Airbus shares surged 10% to 107.50 euros in Paris for their biggest intraday gain since November. In Europe, engine and component supplier Safran SA rose 4.6%, while Rolls-Royce Holdings Plc, which provides turbines for bigger planes, advanced 4.8%.

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