Airbus lowers aircraft delivery targets amid supply chain woes

"Persistent specific supply chain issues, mainly in engines, aerostructures, and cabin equipment," is Airbus's main problem today. The European giant has revised its forecasts and will not deliver 800 aircraft this year.

Airbus had announced the delivery of 800 passenger planes this year. The company will not meet this target. This announcement came last week after a "comprehensive review."

"In commercial aircraft, Airbus is facing persistent specific supply chain issues mainly in engines, aerostructures and cabin equipment," the European giant said in a statement.

It added that "the Company now intends to deliver around 770 commercial aircraft in 2024." It also aims to increase the production rate of A320 family aircraft to 75 per month, which "is now expected in 2027." Therefore, the company has updated its forecasts for this year.

In an interview, Johan Pelissier, the new chairman of Airbus in Europe, discussed the company's plans and supply chain issues. "We are closely monitoring each of our contractors. We have an 'observatory' on-site to make quicker decisions on mitigating risks. We are in a post-pandemic growth phase, which is quite steep, so monitoring is very important," he said.

He added that the order list for individual aircraft from the A320/A321 family is filled until the end of this decade. "Demand is very high. For aircraft like the A350, the reservation list is almost full until the end of the decade," Pelissier noted.

Airbus's planned adjusted profit for this year is $5.8 billion. Airbus expects that free cash flow before customer financing will be $3.7 billion.

"As the basis for its updated 2024 guidance, the Company assumes no additional disruptions to the world economy, air traffic, the supply chain, the Company’s internal operations, and its ability to deliver products and services," the statement read.

Furthermore, Airbus had to record approximately $947 million in its financial statement for the year's first half. "These are mainly related to updated assumptions regarding delivery schedules, workload, purchase costs, increased risks, and costs over the life of certain satellites, as well as telecommunications, navigation, and observation services," the statement read.