Airbus Confronts Production Delays Due to Parts and Labor Shortages, Impacting Delivery Schedules

Airbus, the world’s largest aircraft manufacturer, is facing significant challenges in its production ramp-up plans due to ongoing parts and labor shortages. Industry insiders revealed on Thursday that these issues could potentially delay the assembly of several dozen jets in the latter half of the year. Although it remains uncertain whether these delays will jeopardize Airbus’s overall delivery targets for 2024, the production setbacks are already causing delivery schedules to lag, with some airlines experiencing average delays of about 1.5 months.

Despite these challenges, Airbus has maintained its ambitious delivery target of 800 airplanes for 2024, as reaffirmed in their latest quarterly results. However, shares of Airbus dipped around 2% following these reports, reflecting investor concerns amid a stagnant French market.

Currently, Airbus has achieved 204 deliveries since the start of the year and plans to increase its underlying production to 75 narrowbody aircraft per month by 2026. The company is optimistic that it can recover from any temporary setbacks in time to meet this medium-term production goal, although the margin for further delays is diminishing.

The complexity of the supply chain, which contributes up to 80% of the components for Airbus jets and involves up to nine layers of suppliers, adds to the production challenges. For instance, lead times for critical parts such as forgings have doubled to as much as two years, and disruptions continue in the supply of specialized components like aircraft seats, particularly for wide-body models.

Airbus conducts monthly internal meetings to align its industrial production with long-term demand, planning parts orders 12-13 months in advance for standard models like the popular A321neo, and even longer for more customized variants. However, suppliers are increasingly deferring these monthly parts requests, indicating further potential delays in moving aircraft to assembly lines later this year.

As the aviation industry looks towards the upcoming annual summit in Dubai, hosted by the International Air Transport Association, concerns about aircraft shortages are expected to dominate discussions for the second consecutive year.

In a positive development amidst these challenges, Airbus is reportedly close to obtaining delayed certification for its A321XLR passenger jet, with the European Union Aviation Safety Agency (EASA) anticipating certification by this summer, ideally in time for the Farnborough Airshow in July. This certification could provide a much-needed boost to Airbus’s production and delivery ambitions amid ongoing delays.

Sources: AirGuide Business airguide.info, bing.com, reuters.com