Airbus Faces Challenges in Meeting Full-Year Delivery Target of 770 Aircraft

Airbus Faces Challenges in Meeting Annual Delivery Target

Airbus is at risk of failing to meet its 2023 target of delivering 770 aircraft, according to analysts from Bernstein in a recent note. The company delivered 50 aircraft in September, bringing its total for the year to 497. To achieve its annual goal, Airbus will need to deliver more than 270 aircraft in the fourth quarter, a significant increase from its previous rates.

“The risks to reaching the full-year target of 770 deliveries, previously revised down from 800 in June, have heightened, leading us to lower our forecast to 750,” Bernstein analysts stated.

Airbus has struggled with various challenges in recent months, particularly a shortage of key components such as engines and interior fittings, which are essential for the final assembly of aircraft. The supply chain issues relate mostly to LEAP and GTF engines, with manufacturers finding it difficult to meet demand.

In September, GE Aerospace revealed that the pace of LEAP engine deliveries was improving more slowly than anticipated, which has further complicated Airbus’s situation. Additionally, the availability of GTF engines has been hindered by the necessity to provide spare engines for grounded aircraft, causing delays in Airbus’s production timelines.

Moreover, Airbus is facing supply chain difficulties not only with engines but also with delays in the delivery of seats and other interior components, which have affected its production capabilities. Spirit AeroSystems, a key supplier for Airbus, has encountered significant challenges in delivering crucial parts like landing gear and auxiliary power units.

While some progress has been made, these ongoing issues are likely to slow down production, raising doubts about Airbus’s ability to ramp up sufficiently in the fourth quarter. Despite these hurdles, Airbus has not officially revised its annual guidance and is anticipated to uphold its target during the upcoming third-quarter earnings announcement.

Historically, Airbus has been able to execute a high volume of deliveries in December, occasionally surpassing 90 aircraft in the final month of the year. However, if conditions do not improve by early December, the company may have to adjust its delivery forecast, similar to the adjustments made in 2022.

Concerns also persist for the longer term, with Bernstein analysts highlighting that supply chain issues might continue into 2025 and beyond. They revised their delivery expectations for 2025 down from 870 to 820 units, and for 2026 from 1,000 to 910 units, indicating that Airbus’s production ramp-up could be slower than previously expected.