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Airbus Unveils New Business Jet in Hunt for Corporate Demand

Airbus Unveils New Business Jet in Hunt for Corporate Demand

(Bloomberg) — Airbus SE is betting that its corporate-jet division won’t be as hard hit by the pandemic as commercial flights as the planemaker unveiled a business version of its A220 model.



a close up of a sign: The Airbus SE logo sits on the company's offices ahead of the 53rd International Paris Air Show at Le Bourget in Paris, France.


© Bloomberg
The Airbus SE logo sits on the company’s offices ahead of the 53rd International Paris Air Show at Le Bourget in Paris, France.

The aircraft will have three times more cabin space and cost about a third less to run than competing models, said Airbus, which took over the development of the plane from Bombardier Inc. in February. The model is based on the A220-100 and will be able to fly as far as 10,500 km, enough to connect London to Los Angeles.

The global spread of the coronavirus has prompted gloomy predictions about the future of business travel, with demand likely to be hurt as companies get used to virtual meetings. Still, concerns about rising infection rates make private jets a more attractive proposition for those who do need to travel and can afford it.

Airbus announced six orders for the new model on Tuesday, with two coming from Swiss aviation firm Comlux, which helped design the interior of the aircraft. The other four orders were from undisclosed customers.

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The European group already has corporate models based on its A320-family, A330 and A350 aircraft.

“Based on its compelling market appeal, we see promising demand for this aircraft in the growing business-jet market,” Benoit Defforge, the president of Airbus Corporate Jets, said in a statement.

Airbus’ core business of manufacturing commercial aircraft has been hard-hit by the pandemic. The company plans to cut 15,000 jobs and doesn’t see a rebound in

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Airbus Takes a Risky Course and Holds the Line on Production

Airbus Takes a Risky Course and Holds the Line on Production

Airbus (OTC:EADSY) ended last month with a whopping 7,501 commercial jet orders in its backlog. That’s close to a record high and represents more than eight years of production at 2019 production rates.

This big order backlog hasn’t shielded Airbus from the COVID-19 aviation downturn, though. The European aerospace giant has been forced to cut production significantly this year. With air travel demand showing no signs of recovery so far, Airbus faces pressure to cut output even further. So far, it is resisting this pressure, according to a recent Reuters report. This is a risky strategy that could pay off if demand rebounds meaningfully within a year or so, but could backfire otherwise.

Airbus has reduced production

Airlines across the world are bleeding cash and have cut capacity dramatically. As a result, even those that had aggressive growth or replacement plans entering 2020 now have no need for new jets in the near term. This led to a sharp drop in aircraft deliveries at both Boeing (NYSE:BA) and Airbus last quarter.

An Airbus A350 flying in front of a cloud.

Image source: Airbus.

Boeing is radically slashing production to match demand. Wide-body production will decline by about 50%. Demand for freighter and military variants of the 747, 767, and 777 is the only thing preventing an even bigger output cut. Meanwhile, it plans to gradually ramp up 737 MAX production to a rate of 31 per month by early 2022. That would still be 46% below its previously planned production rate of 57 per month. But with more than 450 737 MAX jets in storage waiting to be delivered, it can’t go any faster.

Airbus has also reduced its near-term wide-body production plans by nearly 50%, albeit from a lower base. However, it made more modest adjustments to its narrow-body output, cutting A320-family production by about a third and

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