Airbus said it would deliver fewer planes by the end of the year than originally forecast and slow plans to increase production of its best-selling family of jets, in the latest sign of the supply chain constraints hampering the recovery of the aviation industry.
The world’s biggest plane maker said it was now aiming to deliver “around 700 aircraft” by the end of the year instead of its previous target of 720.
It is also adjusting the planned output of its A320 family of jets for this year and next. Airbus said it was now targeting a monthly production rate of 65 in early 2024 — some six months later than originally forecast. The company, however, said it was sticking with its plan to get to a monthly rate of 75 jets by 2025.
It also stressed that its earnings and free cash flow guidance for the year remained unchanged.
Airbus chief executive Guillaume Faury said the company had delivered a “solid” performance in the first half of the year in what he described as a “complex operating environment”, citing disruptions to supply chains, logistics and energy supplies as well as high inflation.
Like other global manufacturers, including US rival Boeing, Airbus is struggling with a shortage of raw materials, electronic components and other parts. Faury warned in an interview with the Financial Times last week that he expected the crisis to last until next year.
Supplies of engines have been a particular problem. Airbus had 26 “gliders” — aircraft that have been built but are sitting in storage without engines — at the end of June. Faury said on Wednesday he thought the company would be able to get back to zero gliders by the end of this year.
He said there had been no new “single event” in the supply chain that had led to the modification of the company’s guidance. Rather, Airbus had in recent weeks tried to make a “deep and fair assessment” of the environment based on a lot of discussions with suppliers.
“We are trying to go as fast as we can but have to recognise the environment for what it is,” Faury added.
Despite the constraints, Airbus is exploring the feasibility of increasing the rate of production of its widebody aircraft, which typically fly on long-haul destinations, amid signs that international air travel is recovering.
The changed targets came as Airbus reported adjusted earnings before interest and tax of €2.64bn for the first half, 2 per cent lower than a year earlier. The figure should reach €5.5bn by the end of the year.
Free cash flow before customer financing and acquisitions is still expected to come in at €3.5bn in 2022.
Sash Tusa, analyst at Agency Partners, described the results as a “bit of a loss of thrust”.
While the cut to full-year deliveries and the flattening of the ramp-up of the A320 “should not really matter” given that Airbus was still outproducing Boeing by 1.5 to 1, the European company “is losing a bit of momentum as macro conditions get tougher”, he said.
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