International Airlines Group (IAG) has been forced to reconsider its network plans, potentially through to early 2021, because of delivery delays impacting the Airbus A321neo.

Airbus recently cut its 2019 delivery target by up to 30 aircraft, because of problems with the A320neo-family production ramp-up at its Hamburg final assembly lines. The problems largely relate to increased demand for the complex Airbus Cabin Flex layout on the A321neo and A321LR.

“We’ve spent a lot of time with Airbus and it’s very clear that the A321 Hamburg issues are going to take some time to fix,” IAG CEO Willie Walsh said, speaking on IAG’s third-quarter earnings call Oct. 31.

Aer Lingus took delivery of its first 184-seat Airbus A321neoLR in late July. The Irish IAG carrier launched commercial services with the type on Aug. 2, between Dublin and Hartford, Connecticut.

Walsh described the delays as “disappointing” and said they could impact IAG’s network planning for the coming two years.

“We are anticipating delays on deliveries for A321s. We’ve now replanned our network, particularly with regards to Aer Lingus transatlantic, to reflect planned A321LR delays, which we see continuing through 2020, 2021 and may be into the early part of 2022.”

Walsh recently met with Airbus CEO Guillaume Faury, who gave him “the best and clearest understanding that I’ve had for some time” on Airbus’ plans to address the situation and likely timelines for the remaining aircraft deliveries.

“I suppose the good news is we’ve got a better sense of the extent of these delays. We also have a better understanding as to what Airbus is doing to address them and we’ve got greater confidence in the Airbus plan to actually resolve the issue,” Walsh said.

By the end of September, Airbus had delivered 571 aircraft in 2019, leaving it with 289 aircraft to hand over before year-end to hit its revised 860-aircraft delivery target.

Responding to a question on the results webcast, Walsh said IAG has also agreed a confidential compensation settlement with Rolls-Royce, relating to engine issues on the Boeing 787.

“The financial impact is not the issue,” Walsh said. “It’s very much the customer impact and it’s the impact on the flexibility we have. We are seeing an improvement, so I think Rolls-Royce are certainly delivering better to what they had previously indicated, but there’s still work to do there.”

Victoria Moores victoria.moores@informa.com