Wednesday 29 April 2020

Airbus Updates No.2629

Collapse of Virgin Atlantic Could Harm Airbus' A330 and A350 Backlogs Severely



While the failure of the airline would be a major blow to Virgin workers and the aviation sector, Airbus would also be impacted. The company has in recent years placed orders with Airbus for planes from its A350 and A330 widebody programs - some of the highest-priced jets on their aircraft menu. Of those, there are still 18 planes that are yet to be delivered to Virgin.

According to the most recent order book, there are eight A330-900 planes that have been ordered but not yet delivered to the airline - with a further six of these aircraft due to come on lease from Air Lease Corporation.

These were ordered last year and are set for delivery from 2021 - with the wings to be made at Airbus Broughton. The total cost at list prices for these 14 planes is around £3.3bn (USD3.7 Billion). Virgin also placed an order for eight A350-1000 - the most expensive plane now on offer from Airbus as the A380 program is wound down.

Four of these £300m (USD374.2 million) planes have been delivered - leaving another four to handover, worth a combined £1.2bn (USD1.5 Billion) Added up that makes £4.5bn (USD 5.6 Billion) worth of orders - although part of this money will have already changed hands.
This explains why Airbus has been keen for the UK Government to support Virgin and other struggling airlines.


In a letter seen by broadcaster Sky, Airbus’ UK chairman John Harrison warned that Virgin Atlantic’s collapse could have an extremely negative impact on the A330 program.

“As you will be aware, all wings of these aircraft are designed and manufactured in the UK, and orders from airlines like Virgin are vital for the continuation of our business,” 

he added.

This makes the coming days important for both Virgin and Airbus, which employs up to 6,000 workers at Broughton and has already announced reductions in production rates for the A320, A330, and A350.

Richard Branson has pledged his luxury island resort as collateral to help get a UK Government bailout. It comes as Virgin Group's airline in Australia enters administration. However, he has been criticized for appealing for taxpayer aid rather than drawing on his huge wealth. Sir Richard's fortune is thought to be well over £4bn. The large US airline Delta also owns 49% of Virgin Atlantic.

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