Airbus Anticipates Improvement in Supply Chain Issues by H2 2023

Airbus revealed that profits more than halved in Q1 2023 compared to the same period in 2022, yet the Original Equipment Manufacturer (OEM) expects the situation to improve in the second half of 2023.

“The first quarter confirmed strong demand for our products, particularly for commercial aircraft,” said Guillaume Faury, the Chief Executive Officer (CEO) of Airbus. “We delivered 127 commercial aircraft, which is reflected in the Q1 financials. The quarter also benefited from a good performance in Helicopters.”

Faury also pointed out that the current operating environment is “adverse,” alluding to “persistent tensions in the supply chain.”

The European OEM expects to deliver 720 aircraft by the end of 2023. However, deliveries will be backloaded, meaning more aircraft deliveries will be completed in the second half of the year.

“We remain focused on delivering the commercial aircraft ramp-up and longer-term transformation,” Faury added.

In terms of production rates, Airbus is continuing to work to ramp up the A220 and A320neo aircraft families’ monthly rates to 14 and 65, respectively. The manufacturer plans to produce 14 A220s per month by “the middle of the decade”, while on the A320neo aircraft family program, the rate is set to go up to 65 by the end of 2024 and increase further to 75 per month in 2026.

The 75 A320neo aircraft per month rate will be achieved with the help of 10 Final Assembly Lines (FAL) throughout the world, including France, Germany, China, and the United States (US). Recently, Airbus announced that it will add another FAL to its Tianjin, China facilities that will help it reach that 75/month production rate.

The new FAL is scheduled to commence operations by the end of 2025.

Meanwhile, production rates of wide-body aircraft are set to be four per month for the A330 and nine per month for the A350.

Overall, the OEM earned €11.8 ($13 billion) in revenue, ending the quarter with a reported net profit of €466 million ($515.6 million). In Q1 2022, the company’s reported net profit was €1.2 billion ($1.32 billion). Airbus’ backlog grew by 3.3% Year-on-Year (YoY), going from 7,023 aircraft in Q1 2022 to 7,254 aircraft in Q1 2023, while it delivered 10.6% fewer aircraft in Q1 2023 YoY: 127 versus 142 in Q1 2022.

Boeing, Airbus’ main rival, delivered 130 aircraft and earned a total revenue of $17.9 billion, ending Q1 2023 with a net loss of $425 million.