Airbus Faces Engine Headwinds: Can Deliveries Recover in 2025?

Airbus delivered approximately 55 commercial aircraft in April 2025, according to Bloomberg News, underscoring the ongoing struggle to meet its ambitious production targets amid crippling engine shortages. The French aerospace giant is racing to clear a backlog of undelivered planes while grappling with supply chain bottlenecks that threaten its 2025 goal of 820 deliveries—a 7% increase over 2024’s 766. Yet, with first-quarter deliveries lagging at 134 aircraft, investors must weigh whether Airbus can rebound or if its shares face further pressure.

Historical Context: A Struggle to Ramp Up

Airbus has long aimed to boost output of its best-selling A320neo narrowbody series, targeting 75/month by 2027. However, production has been repeatedly derailed by a shortage of CFM Leap-1A engines, a critical component for the A320neo family. In 2024, A320neo deliveries totaled 602 units, a 5% increase from 2023 but still below capacity. By early 2025, 43 A320-family aircraft had been completed but remained undelivered due to engine delays, while 70 more sat in production lines awaiting engines.

The first quarter of 2025 delivered only 134 aircraft—a mere 20% of the annual target—suggesting a projected 660 deliveries for the year if current trends persist. This falls far short of the 820 target, which would require a 50% jump in quarterly deliveries from Q1’s pace.

Engine Shortages: The Core Issue

The CFM Leap-1A shortage, sourced from CFM International (a joint venture of General Electric and Safran), has become a strategic vulnerability. While Airbus has prioritized delivering aircraft with installed engines first, roughly 25–30 “gliders”—planes without engines—remain in storage. One such aircraft, a China Eastern Airlines A320neo, was photographed in Toulouse without engines, highlighting the severity of the problem.

Production rates reflect this crisis:
- In April, Airbus produced 56 aircraft, including 40 A320neos, below its 50/month target for the narrowbody.
- The A350 widebody program, hamstrung by fuselage delays from supplier Spirit AeroSystems, managed only 7 units in April, barely exceeding its 6/month 2025 target.

Investors have already priced in these risks: Airbus’s shares have underperformed peers like Boeing (BA) since mid-2023, down 18% over the past year despite rising global air travel demand.

Mitigation Strategies and Remaining Risks

Airbus has two paths to recovery:
1. Clearing the Backlog: By accelerating test flights and engine installations, the company aims to deliver previously stranded aircraft. March 2025 saw 53 A320-family first flights—up from 38 in January—a sign of progress.
2. Supply Chain Overhaul: Finalizing its acquisition of Spirit AeroSystems’ facilities by June 2025 could stabilize A350 and A220 production. However, integrating Spirit’s Boeing-linked IT systems poses risks.

Yet, external headwinds persist:
- Tariffs and Trade Tensions: U.S.-EU disputes over aircraft subsidies have delayed component imports, adding costs and delays.
- Backlog Sustainability: With 8,726 orders outstanding (enough to keep factories busy for ~14 years at current rates), Airbus must resolve bottlenecks to avoid customer cancellations.

Industry Outlook: Demand vs. Supply

While global air travel is booming—projected to hit 10 billion passengers in 2025—Airbus’s supply constraints could cede market share to Boeing. The U.S. rival, though also facing production caps on its 737 MAX, benefits from a shorter backlog and fewer geopolitical hurdles.

Analysts at Forecast International now project ~840 deliveries in 2025, slightly above Airbus’s target, but this assumes a “best-case” ramp-up. CEO Guillaume Faury remains cautiously optimistic, stating, “We’re assessing mitigations with suppliers and customers, but clarity on trade policies is critical.”

Conclusion: A Delicate Balancing Act

Airbus’s 2025 delivery target hinges on resolving two key issues: engine shortages and supply chain integration. With April’s deliveries at 55 jets and Q1’s 134 total, the company must deliver ~686 aircraft in the remaining nine months—a 50% increase over Q1’s rate—to hit 820. While achievable if production stabilizes, persistent bottlenecks or tariff disputes could force a downward revision.

For investors, the stock’s current valuation—trading at 10x 2025 EBIT estimates—reflects skepticism about these risks. Yet, the 8,726 backlog and $1 trillion annual airline revenue (per Avolon) provide long-term tailwinds.

Final Take: Airbus’s shares offer a high-risk, high-reward bet. Investors should monitor Q2 production data closely: if deliveries climb above 65/month, the stock could rebound. If delays persist, the 820 target—and investor confidence—will remain in doubt.

Stay tuned for updates on Airbus’s Q2 results and supply chain developments.