Customers and suppliers warn: Airbus wants to push more aircraft into the market

Warn customers and suppliers
Airbus wants to push more aircraft into the market

How many planes does it take? Potential buyers and suppliers currently have different ideas than the Airbus Group. He is noticeably recovering from the Corona crisis and now wants to ramp up production with power. The fear of overproduction increases.

The aerospace company Airbus is leaving the corona crisis behind faster than expected and is raising its profit expectations for the second time within three months. Group boss Guillaume Faury now expects an adjusted operating result (EBIT) of around 4.5 billion euros, 500 million more than before. But with the plan to increase production of the bestseller A320 / A321 in the next two to three years above the level before the pandemic, Faury is feeling headwinds from customers and suppliers.

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There is enough demand for 75 short and medium-haul models per month, said the manager in Toulouse, France. “But we have to look at the situation in the supply chain.” There are already delays with some suppliers.

Airbus is currently ramping up production of the A320 series after it had been throttled from 65 to 40 aircraft per month in the Corona crisis. This has been causing “tensions” at some suppliers since September. It is about the reinstatement of workers or logistics problems. Nevertheless, Faury wants to increase A320 production to 65 machines per month by 2023; It should be ready in summer 2023.

Braking suppliers and customers

In May, he asked suppliers to ensure a quota of 64 aircraft per month by the second quarter of 2023. “The curve stays the same,” said Faury. Suppliers and customers are putting the brakes on Airbus, especially when it comes to ramping up production to 70 or 75 machines afterwards: engine manufacturers are concerned about whether they can keep up, leasing companies are warning of an oversupply that could destroy prices.

Faury was tight-lipped: “We have our own views on whether the market can handle bigger numbers,” he said. The feasibility study has not yet been completed. Six aircraft of the long-haul A350 are to be built per month in early 2023, one more than before. Airbus had last targeted this value for autumn 2022.

Orders crumble

This year, Airbus plans to hand over 600 (2020: 566) commercial aircraft to customers, 424 (341) by the end of September. But the orders are crumbling: Since January – cancellations deducted – 133 (300) aircraft have been ordered. Financially tight airlines refused to accept aircraft that had been ordered during the crisis.

After nine months, an operating result of just under 3.4 billion euros has already been posted; A year ago, Airbus was in the red at 125 million euros. Sales rose by 17 percent to 35.2 billion euros. In the third quarter, the operating result fell by almost a fifth, but was better than analysts expected. The bottom line is a net profit of 2.6 billion euros after nine months.

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