Saudi carriers keep close watch on Airbus A320neo deliveries

LONDON: Airbus has been hit by engine issues on the upgraded A320neo, the aircraft chosen by Saudi low-cost carrier flynas to form the backbone of its new fleet.
Airbus reported a slump in first half operating profit on Thursday as it flagged up ongoing issues with its upgraded A320neo — a concern for several regional carriers with orders placed for the aircraft worth billions of dollars.
“We are facing challenges due to ongoing engine issues but we have a clear road-map in place and have maintained our full-year guidance,” said Airbus Chief Executive Tom Enders.
“Achieving the aircraft delivery target depends on the engine suppliers meeting their commitments.”
Flynas said in January it had agreed to purchase 120 A320neo aircraft at a list price of SR32 billion ($8.6 billion).
That includes 80 firm orders with another 40 purchase rights.
Other regional carriers with large A320neo orders include Go Air, Indigo, Air Asia and Qatar Airways. Saudi Arabian Airlines, known as Saudia, also agreed to lease about 30 A320neo aircraft at the Paris Airshow in 2015.
London-based aviation analyst Saj Ahmad said that Airbus was having a “torrid time” with engines on the aircraft.
“New customers like flynas who ordered the A320neo this year will be concerned — they have an engine selection to make, if they haven’t already.”
Airbus, the world’s second largest plane maker after Boeing, said that its 2017 delivery schedule was largely dependent on engine deliveries.
“Engine supplier Pratt & Whitney has introduced some fixes but these improvements have not come through yet on a reliable basis under normal service conditions. Close to 200 A320neo deliveries are still targeted for 2017 but this objective is more challenging given these engine issues,” Airbus said.
Airbus also revealed a new output cut for the double-decker A380, the world’s largest commercial passenger aircraft.
For the second quarter, Airbus reported a second-quarter operating profit of €859 million ($1 billion), down 27 percent.
The plane maker reported its results a day after rival Boeing saw its shares hit a record after posting profits that beat estimates.
Airbus also said that Qatar Airways had canceled four A350 delivery slots.