Airbus opens first factory on Boeing’s home turf

Airbus Group, challenging Boeing for supremacy in the $80 billion market for large commercial airliners, is opening its first jet production site on the US competitor’s home turf.

The French-based manufacturer on Monday is slated to officially unveil a $600 million plant in Mobile, Alabama, although the first of the A320 jetliners to be built there have been taking shape since July.

The plant is expected to spur job growth and attract aerospace suppliers to the Southeastern US, where Boeing and Brazil’s Embraer also have footholds.

It’s the second single-aisle aircraft factory Airbus has opened outside Europe as the aerospace manufacturer seeks to lower costs and raise its visibility with potential airline clients in a market historically tilted to Boeing.

“It brings them closer to one of the world’s greatest commercial markets,” said Kevin Michaels, vice president with the aerospace practice of consultant ICF International.

Airbus still lags behind Boeing in the US, the world’s biggest market for airliner sales. Its 960 single-aisle planes in US airline fleets represent only 20 per cent of the total, although orders in its backlog would boost the share to 40 per cent.

Most of the planes built in Mobile will be delivered to North American customers, Airbus said. Deliveries are due to start early next year, with the production tempo increasing to four aircraft a month by early 2018.

Airbus also produces four A320s a month in Tianjin, China, which is poised to eclipse North America as the largest aviation market.

“It’s all about location,” said Michel Merluzeau, vice president for aerospace strategy and business development with consultant Frost and Sullivan. “It’s about where you do business, and how that property is going to grow over time.”

Jet production costs and factory capacity are vital as Boeing and Airbus plot to boost output of single-aisle jets that serve as workhorses for the global airline fleet to upwards of 60 aircraft a month.

The two companies are racing to reap profits from a near-record backlog of narrowbody jet orders: 5,181 for Airbus to 4,253 for Boeing, according to data compiled by Bloomberg Intelligence.

Boeing makes its 737 jets at a single factory in Renton, Washington, although the company is considering adding a plant in China where planes would be finished and delivered.

Airbus spreads the work across three factories spread around the globe. Adding a fourth plant in Alabama will give Airbus greater flexibility to ratchet output up, or down, while saving on land, energy and labour, Mr Michaels said.

– Bloomberg