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Airbus, which last year paid $12 billion to U.S. suppliers of the parts and services it needs to build its planes, will double that spending by 2020 as it gears up to build a new plant in Mobile, Alabama.
Airbus Americas Chairman Allan McArtor will tell an educational summit in Los Angeles on Friday that the spending boost will result from company’s planned $600 million plant to assemble its A320 short- and medium-distance planes.
Southern California is likely to be a big winner from the procurement, with a doubling of the $1 billion the aircraft maker, part of EADS, spends in the region.
“LA has a good talent base and there’s a lot of innovation going on here,” McArtor said in an interview after attending groundbreaking ceremonies for the $80 million factory that Valencia, California-based Aerospace Dynamics International is building to supply large structural components of Airbus’ next generation A350 extra-wide body aircraft.
To get the added work, however, the Airbus executive said southern California will need to become more competitive with other states and countries by improving its educational institutions to turn out skilled workers, engineers and others the aerospace industry will demand.
“We have to make it attractive here so that the brightest kids don’t go to private equity firms,” McArtor said. “If they can’t improve the business climate here, then southern California may lose out to South Carolina, Texas or somewhere else.”
By 2015 Airbus expects to have 13 daily flights by carriers flying its A380 aircraft to Los Angeles International Airport.
That equates to $9.4 billion in added economic activity in tourism and other services, Airbus said, making calculations based on a 2007 study by the Los Angeles Economic Development Corp.
The flights would add an estimated 3,900 jobs in the region.
Airbus, which spends more than 40 percent of its procurement budget on U.S.-based suppliers, projects annual growth in air travel will more than double over the next 20 years.
By 2031, McArtor estimated 32,550 airplanes will be in service, up from 15,550 today.
By then, China will pass the United States as the largest market for air travel, the executive said, and will account for 35 percent of all newly delivered aircraft. North America and Europe will each account for 21 percent.
Editing by David Holmes. Copyright (2012) Thomson Reuters.