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Airbus SE is coming up short on the millions of parts that make up the company’s commercial aircraft, and the situation is getting worse rather than better for the world’s largest planemaker.
The manufacturer warned late on Monday that it’s experiencing a shortage on engines, aerostructures and cabin interiors, which in turn is sabotaging the company’s delivery plans.
As a result, Airbus pared back a whole slew of longer-term goals — from operating profit, cash generation and jet handovers to the monthly production rates of its all-important A320 model.
The challenges facing Airbus and rival Boeing Co are caused not by slack demand for its products, but rather a supply chain that’s been severely stretched for years.
Airbus has long warned of the issue after the pandemic first upended the global aviation industry and then left it unprepared once air travel came roaring back.
What’s new is the breadth of the problem, with chief executive officer Guillaume Faury saying on Monday that engine shortages are now coming up as the latest pinch point.
“That is a new situation that we were not expecting,” Faury said on a call after Airbus issued its surprise revisions for the year.
The company now expects to hand over 770 aircraft rather than 800 units in 2024, it said Monday after European markets closed. Adjusted earnings before interest and tax will reach €5,5 billion (uS$5,9 billion) this year, down from a previous goal of as much as €7 billion. The company also cut its outlook for free cash flow before customer financing to about €3,5 billion.
Speaking on a call with reporters, Faury said the situation isn’t getting any better, requiring the company to adjust its goals.
Airbus also pushed back its goal to produce 75 of its A320 single-aisle jets per month by one year to 2027. That more conservative approach stands to further intensify a shortfall in new jets, given that Boeing is also making its 737 model at a significantly reduced monthly rate. — Bloomberg.
Bongani Ndlovu
Online Reporter