Airbus to build jets in Alabama as airlines renew fleets

Airbus SAS plans to open a commercial jet assembly line in Alabama, its first in the US, to meet demand as North American airlines renew their fleets.

Airbus will use the site to assemble A320 single-aisle aircraft that compete with Boeing’s 737, the French firm said yesterday.

Construction on the venue in Mobile will start next year, with deliveries from 2016, Airbus said.

The facility will give Airbus greater proximity to US customers as it seeks to gain a larger slice of the single-aisle market, the most popular category in civil aviation.

A final assembly line in Alabama will let Airbus cut labour costs and help match dollar revenues with dollar costs, and hand the firm more marketing clout to appeal to national carriers.

“The time is right for Airbus to expand in America,” Fabrice Bregier, chief executive said in the statement. “The US is the largest single-aisle aircraft market in the world.”

The Mobile plant will produce 40 to 50 planes annually by 2018. Mr Bregier projected US airlines would need over 4,600 single-aisle planes over the next 20 years.

Today, Airbus has only a 20% share of the US market for single- aisle planes, while the global split with Boeing is about equal in that category.

A major portion of the supply chain for Airbus planes is already in the US, including parts from firms including Spirit AeroSystems Holdings and General Electric.

An assembly line with planes going directly to local customers would give Airbus a visible presence and break Boeing’s monopoly of building large civil planes in North America.

A final assembly line is where the biggest portions of the plane, including the fuselage, the wing, the tail section, and engines, get assembled to create a plane.

Airbus already has one such non-European line for single-aisle planes, in Tianjin, China.

The line carries out 5% of the total work in building a plane. The biggest and most technologically demanding parts of Airbus planes are designed and constructed in Europe. The wings are built in Britain, cockpits in France, the fuselage and parts of the wing in Germany, and the tail in Spain.

Building jets in Alabama would allow Airbus to take advantage of so-called right-to-work laws, which bar union membership as a requirement of employment.

That can hold down employers’ wage and benefit costs. Boeing chose nearby South Carolina, another right-to-work state, for a 787 Dreamliner plant in 2009.