As you carry out online stock trading, you’ll figure out that the earnings of a company depend on its relationship with customers. Get that wrong, and it would result in a loss of goodwill. That affects the reputation of a business and can cause its stock value to plunge.
Airbus (Nasdaq: $EADSY) has been going through such a phase, and stock traders and investors will be watching how the company’s failure to meet delivery targets affects it stock. But it now has the latest version of its A350 to attract customers.
The New A350 from Airbus
Airbus’ latest A350 has undertaken test flights and demonstration tours. This does offer a bit of optimism for a company that has been unable to meet demand. The first flight of the newest A350-1000 long-haul plane lasted for around 4 hours and, in spite of all the issues with delivery, the company has reaffirmed that it will manage the delivery of 50 planes of a related model by the end of the year in spite of its customers having had to face repeated delays. The company also carried out demonstration tours in one of its key markets, China.
Competition with Boeing 777
The A350-1000 has a capacity for around 366 passengers. It plans to start delivering the plane to customers in the second half of 2017. This is again a few months farther away from the date initially forecasted. The A350-1000 competes with the 777 wide body jet by Boeing. And Boeing is planning to improve on the popular 777 with the 777X. This could pose tough competition for the A350-1000 since the 777X can seat 400 passengers or more. But it is only expected to enter service by the end of this decade.
Meeting Customer Demand Still a Challenge
$EADSY has faced struggles with meeting customer demand due to suppliers failing in prompt parts delivery. There have also been other internal issues for the plane manufacturer based in Europe. As a result of the delayed deliveries, airlines have had to change their schedule plans. In the 10 months this year, Airbus has only managed to deliver 30 planes. It also has a full-year commitment for delivering at least 670 planes. Over 150 are yet to be delivered as 2016 is about to come to a close.
To face the competition from the bigger Boeing 777, Airbus is considering manufacturing a larger version of its A350. There was also a smaller version planned, but the concept didn’t have much demand. In any case, all such developments will need to be carried out along with Airbus’ efforts to sort out its delivery issues and satisfy its customers.
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