Slow Airbus Deliveries Raise New Concerns Over Annual Target

Airbus Faces Delivery Challenges as September Closes

By Tim Hepher

PARIS – Airbus is experiencing a slower delivery pace as September comes to a close, prompting concerns about the company’s ability to meet its revised annual delivery targets, according to analysts and industry insiders.

In July, Airbus issued a profit warning and reduced its full-year delivery goal from 800 to 770 aircraft, citing shortages in engines and other critical components. Additionally, it postponed its medium-term production target to 2027.

The delays in aircraft deliveries and ongoing production challenges, particularly concerning its popular narrowbody jets, have led to increasing frustration within the company. Airbus CEO Guillaume Faury has expressed dissatisfaction over the stagnant production levels, as reported by sources familiar with internal discussions.

As of late September, Airbus has delivered approximately 30 aircraft, bringing its total deliveries for the year to about 477, based on data from consultancy Cirium Ascend. If the current trend continues, the company may end the month with only 36 additional deliveries, totaling around 483 for the year, which is lower than the 488 deliveries made at the same point last year. Notably, Airbus delivered 55 jets in September of the previous year.

“They have been closely tracking 2023 cumulative delivery numbers all year, supporting concerns that they may not reach the 770 target,” commented Rob Morris, head of global consultancy at Cirium Ascend.

An Airbus representative pointed to the company’s latest guidance without providing further details. Historically, Airbus has achieved impressive results in the fourth quarter; however, ongoing supply chain issues and internal production problems have raised doubts about its capacity to recover this time.

"Given the year’s performance so far, the risk feels more on the downside than the upside," said Sash Tusa, an analyst at Agency Partners, while expressing concerns about the production ramp-up beyond 2024.

Airbus has indicated it is aiming for “around” 770 deliveries, which allows some leeway to avoid further cuts to its official guidance, a move that could be seen unfavorably by senior management.

In announcing the revised target, Airbus pointed to delays in the delivery of LEAP engines, supplied by Safran and the GE Aerospace partnership CFM, that are critical for the A320neo model, as well as other components like landing gear. Sources close to the Airbus industrial network confirmed that engine shortages continue to impede aircraft deliveries and remain a significant concern for the planemaker.

A spokesperson for GE Aerospace remarked that improvements in engine output in the third quarter are expected but will still reflect pressure compared to last year, with further enhancements anticipated in the fourth quarter.

Currently, Airbus produces around 50 A320neo jets per month, a figure that has changed little over the past year, according to flight tracking data. The inability to achieve significant progress toward a medium-term goal of producing 75 jets per month has increased internal pressure to maintain cash flow, as Airbus builds up inventory for flexibility.

In July, Airbus introduced a cost-cutting and performance enhancement initiative, known as LEAD!, as CEO Christian Scherer cautioned staff about rising unit costs outpacing revenues. The initiative’s primary objective is to ensure that 2024 deliveries are safeguarded, as outlined in a memo from Scherer. He emphasized the importance of thoroughly examining costs without restrictions.