New Airbus commercial CEO signals production focus, backs bigger A220

Adds interview with SMBC Aviation CEO, context, new Airbus quote

By Tim Hepher and Padraic Halpin

DUBLIN, Jan 26 (Reuters) - The new CEO of Airbus' AIR.PA jet division pledged on Monday to focus on increasing production of models including the A350 wide-body jet, and appeared to back a larger version of the regional A220.

"The whole ecosystem is under pressure," Lars Wagner told the Airline Economics conference in his first public appearance since taking over as head of Airbus' core unit on January 1.

"The way I look at it right now is, first, there are a lot of issues that we need to tackle in order to manage the ramp-up," Wagner said. Airbus has been struggling to reach 75 narrow-body jets a month and is slowly boosting output of large jets.

Wagner said his second main objective would be to review competing engine technologies and balance the need for fuel savings against durability for the next generation of narrow-body aircraft to be developed in the coming decade.

Airlines say engine makers have delivered on promises to cut fuel consumption at the expense of increased wear and tear, resulting in maintenance bottlenecks.

"I think we need to solve the durability question first," Wagner said.

The former head of German engine maker MTU Aero Engines MTXGn.DE exchanged views on stage with Air Lease Corp <AL.N> CEO John Plueger, who complained the biggest headache was getting aircraft delivered.

A220 NOD

In an unusually public exchange, Wagner asked the leasing veteran what buyers would like to see next.

Plueger said he saw a role for a widely discussed larger version of the A220 regional jet, prompting Wagner to reply "me too".

The head of the world's largest lessor, AerCap AER.N, told Reuters earlier he saw no demand for such an aircraft and that Airbus should keep a laser focus on factory performance.

Wagner appeared at pains to listen to the powerful and often critical Dublin finance audience but avoided committing to any specific strategy.

"Being humble, I'm four weeks in the job," he said.

Asked what message he had for his new supplier, SMBC Aviation CEO Peter Barrett said: "I think delivery, I've said this to him privately and I'm happy to say it publicly."

Both Airbus and Boeing BA.N have improved "but are not there yet," he told Reuters.

"We all understand the challenges that COVID brought ...but at the end of the day we are contracting over many years for billions and billions dollars worth of equipment and you need to have predictability and performance."

(Reporting by Tim Hepher, Padraic HalpinEditing by Tomasz Janowski, Kevin Liffey and Diane Craft)

((tim.hepher@thomsonreuters.com; +33 1 49 49 54 52; Reuters Messaging: tim.hepher.thomsonreuters@reuters.net))