Airbus supports delivery target despite supply restrictions

Airbus has bolstered itself to achieve its goal of delivering around 700 aircraft by the end of the year but warned it would be “anything but a walk in the park” as the airline industry continues to battle supply chain constraints.

The world’s largest aircraft maker said on Friday it was facing “multiple crises” but that supply chain issues were its biggest challenge.

Like other global manufacturers, Airbus has struggled with shortages of raw materials, electronic components and labor availability, just as demand has rebounded in the wake of the coronavirus pandemic. Rising inflation, uncertainty over the war in Ukraine and energy costs have exacerbated the pressures.

Dominic Asam, Airbus’ chief financial officer, said the company had delivered 382 planes through the end of August, leaving about 320 undelivered planes to meet the target.

Issam said at a press conference on capital markets on Friday that the company is “fully committed” to meeting its commitments, “but against the backdrop of turmoil in global supply chains, the delivery of about 700 aircraft in 2022 is nothing more than a walk in the park.”

Airbus in July lowered its original year-end delivery target from 720 to “about 700” aircraft. It has also revised the planned production of the best-selling A320 family of aircraft for this year and next. The company said it was targeting a monthly production rate of 65 percent in early 2024 — about six months after the original forecast. However, Airbus said at the time that it was committed to its plan to reach a monthly price of 75 aircraft by 2025.

Airbus CEO Guillaume Faury on Friday reiterated the price of 75 jets a month. The company expects to produce around 50 months of production by the end of this year.

“Based on the insight we have now from the supply chain, we think it’s manageable, but I won’t tell you it’s easy,” Faury said of the 700-plane target. “There is a lot of work to be done,” he added, noting that Airbus expects the crisis to continue next year.

However, the bottleneck in the supply of engines, which has been a cause of friction between Airbus and engine makers, including CFM International, a joint venture between Safran and GE, is easing. Faury said the number of “gliders” — planes built but stockpiled without engines — fell to single digits from 26 in July.

The company has reached an agreement on engine volumes with CFM International and Pratt & Whitney for 2023 and 2024 and has begun talks about numbers for 2025.

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