Boeing’s setbacks are not enough to make life easier for Airbus. While the commercial aviation market is booming, the European manufacturer is struggling to increase its production rates. As a result, the aircraft manufacturer announced, Monday June 24, at the end of the day, that it would not deliver 800 aircraft in 2024 as planned, but rather 770; its objective of producing, per month, 75 Airbus A320neo family – its best-selling single-aisle aircraft – is postponed by one year, from 2026 to 2027.
At the same time, Airbus revealed that it intended to record a charge of 900 million euros on its accounts for the first half of the year to deal with “commercial and technical difficulties” in its space activity. Airbus now expects to record, in 2024, an adjusted operating profit of 5.5 billion euros, compared to 6 billion to 7 billion euros previously expected. And as 30 fewer planes will be delivered, cash receipts will be lower, with the bulk of payments being made when the airlines receive the planes.
If the markets suspected that the aeronautics giant would be forced to lower its ambitions in terms of deliveries, these new objectives appear “below expectations”, point out UBS analysts. No wonder, then, if this warning on results was poorly taken by the stock market: the Airbus share price plunged by almost 10% on Tuesday.
“Secure sources of supply”
The environment “has recently deteriorated due to geopolitical tensions and especially due to specific difficulties in the supply chain”, explained during an exchange with financial analysts Guillaume Faury, the group’s general manager. A little known music. While the aircraft manufacturer outsources 60 to 80% of its production to subcontractors under pressure, due to lack of skills or cash flow, cabin equipment and other aerostructures were already missing in 2023. But, for several months, the engines are also slow to reach the assembly lines: it has become “a significant problem”recognized Mr. Faury.
The highly fragmented global aeronautical industry was disorganized during the Covid-19 pandemic. It found itself weakened once again by the banning of Russia, a major producer of titanium, then by the virtual closure of the Suez Canal, which lengthened delivery times between Europe and Asia. Enough to encourage Airbus to strengthen its access to strategic components and materials. “We want to secure sources of supply with a more regional dimension to be less sensitive to geopolitical tensions, embargoes, restrictions, difficulties of access or prices which would be difficult to assume”Mr. Faury said on June 13 at the Paris Air Forum.
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