Airbus, Europe’s largest aerospace group, has revised its key industrial and financial targets, reducing its delivery forecast for this year and postponing the production ramp-up of its A320neo family jets amidst ongoing supply disruptions and commercial risks. The company now aims to deliver approximately 770 jets, down from an initial target of around 800 jets. Furthermore, Airbus has pushed back its goal to reach a production rate of 75 jets per month from 2026 to 2027, currently estimated at 50 jets per month.
These adjustments come as Airbus faces skepticism from suppliers regarding its ambitious production schedules and follows a 900-million-euro ($965 million) charge for challenges in its space division. The revised delivery targets suggest a growth rate of 5% for the year, lower than the previously anticipated 9%, leading to a reduction in the main financial forecasts for 2024. Airbus now expects an underlying operating income of about 5.5 billion euros and free cash flow of 3.5 billion euros.
Guillaume Faury, CEO of Airbus, acknowledged the difficult situation, stating, “We are facing headwinds right now; we have to bite the bullet.” The aerospace industry, including Airbus, continues to grapple with rehiring workers and stabilizing supplies post-pandemic. The company also noted significant recent deterioration in engine supplies for its A320-family of jets, primarily impacting its profitability and cash flow.
The engine shortages involve major suppliers like Pratt & Whitney and CFM International, a French-U.S. venture co-owned by GE Aerospace and France’s Safran. Both companies are under pressure to accelerate engine deliveries to meet Airbus’s needs amidst challenging supply chain conditions.
Additionally, issues with other components such as seats and cabin parts have further complicated production schedules. Faury mentioned ongoing strikes at a Safran factory in Canada, which produces components for Airbus and Boeing landing gear, as another layer of the current supply chain problems.
As Airbus navigates these turbulent times, the aerospace giant remains focused on adjusting its strategies and maintaining production continuity to meet global aviation demands.
