Airbus's Engine Shortage: A Storm Cloud Over the Skies of Profitability?
29min read Let me tell you, folks—when the skies get cloudy for Airbus, investors should brace for turbulence. The European plane manufacturer’s April 2025 delivery numbers took a nosedive, dropping to just 59 aircraft, a sharp slide from March’s 71 deliveries. And here’s the kicker: this isn’t just about a temporary hiccup. The root cause—CFM International’s Leap engine shortages—is a problem that’s been simmering for months, and it’s now boiling over into a full-blown crisis.
The Engine of the Problem: Leap’s Lagging Impact
Airbus’s A320neo family, its workhorse narrowbody jets, is utterly dependent on the leap engine. But here’s the rub: 43 A320neo aircraft had already completed test flights by April yet couldn’t be delivered because they lacked engines. Worse, 70 more planes sat in production, not even ready for testing, because engines weren’t available. These planes are effectively “gliders,” grounded until CFM can catch up.
The CEO, Guillaume Faury, warned this isn’t a blip—it’s a summer-long headache. In Q1 alone, 17 planes were parked due to engine shortages. And guess what? Those delays are hitting the bottom line.
Take a look at the chart. Airbus’s shares have been in a tailspin, down nearly 15% year-to-date as investors digest the delivery woes. Compare that to Boeing (BA), which has held up better—up 5%—despite its own struggles. Why? Because Airbus’s engine problem feels systemic, not just cyclical.
Production Rates: A High-Stakes Balancing Act
Airbus aims to churn out 50 A320neos monthly, but April’s output hit just 40 planes. The company insists it’ll ramp up to 75/month by 2027, but let’s be real: how can it hit those targets if engines are scarce? Meanwhile, the A350 program is stuck at 6 planes/month, with only 3 delivered in April, despite producing 7. That’s a logistics nightmare.
The A220, a smaller jet, is also lagging, with production stuck at 7/month instead of the hoped-for 14/month by 2026. And the A330neo? Just 2 delivered in April, half its target. This isn’t just about engines—it’s a supply chain collapse.
The Numbers: A Quarter of Uncertainty
In Q1 2025, Airbus delivered only 134 planes, a figure that annualizes to just 660—far below its 820-target. Investors need to ask: Can they make up the gap? Airbus says “yes,” pointing to a “backloaded” delivery strategy. But here’s the catch: 54 of April’s 59 deliveries were narrowbodies, which are cheaper and less profitable than widebodies like the A350.
The Bottom Line: Cloudy with a Chance of Recovery?
Here’s the deal: Airbus’s 2025 target of 820 deliveries is on life support. To hit it, they’d need to deliver 661 planes in the final three quarters, averaging 220 per quarter—a 38% jump from Q1’s pace. That’s a tall order when engines are still bottlenecked.
Faury’s mitigation plan? Integrating Spirit AeroSystems’ work packages and stabilizing production lines. But with U.S.-China trade tensions adding to supply chain chaos and tariffs hiking costs, this isn’t a quick fix.
Investor Takeaway: Buy the Dip or Bail?
If you’re an investor, here’s what you need to see:
- Engine supplies stabilize by Q3, as promised.
- Inventory backlogs clear, turning parked planes into delivered units.
- A350 deliveries ramp up, boosting margins.
But here’s the risk: If the engine shortage lingers into 2026, Airbus’s valuation could crater further. With $33 billion in orders on the line, any delay eats into cash flow.
Conclusion: The Skies Are Darkening—But Is There a Silver Lining?
Airbus’s April numbers are a red flag. The 43 undelivered test-ready planes and 70 in production are ticking time bombs for 2025’s target. Even if they clear the backlog, hitting 75 A320neos/month by 2027 seems overly optimistic without a guaranteed engine supply.
Investors, keep this in mind: EAD.PA’s stock is down, but so are its chances of meeting targets unless CFM’s engines start flowing like rivers, not trickles. Until then, this isn’t a “buy the dip” moment—it’s a “wait for clarity” caution. The skies might clear, but right now, the clouds are thick with doubt.
Even the engine suppliers aren’t flying high. GE’s aviation division (a CFM partner) has seen its stock drop 8% year-to-date, hinting at broader industry pain.
In the end, the question isn’t whether Airbus can recover—it’s whether it can do so before investors lose faith entirely. The engines may power the planes, but right now, they’re also driving this stock’s volatility. Fasten your seatbelts—it’s going to be a bumpy ride.
