Airbus Navigates Supply Chain Headwinds with Resilient May Deliveries: A Catalyst for Aerospace Investors

In May 2025, Airbus delivered 51 commercial aircraft to 32 global customers, underscoring its ability to maintain momentum despite ongoing supply chain challenges. The European aerospace giant's focus on fulfilling its robust order backlog—bolstered by strong demand for its A321neo variant—positions it as a resilient investment opportunity in an industry grappling with production bottlenecks. While headwinds like engine shortages persist, Airbus's delivery-focused strategy, coupled with anticipated post-Paris Airshow order momentum, suggests the company is primed for sustained growth.

May Deliveries Highlight A321neo Dominance and Operational Resilience

Airbus's May deliveries included 27 A321neos, the stretched variant of its popular A320neo family, which remains the backbone of its narrowbody fleet. This model's demand is driven by its efficiency and flexibility, accommodating up to 244 passengers in high-density configurations. The A321neo's 27-unit May tally accounted for nearly half of the month's narrowbody deliveries, underscoring its role as a cash-flow generator for Airbus.

The company also delivered six A220-300s (targeted at regional carriers) and three A330neos, while two A350-900s were handed to Emirates and Turkish Airlines. Notably, zero gross orders were recorded in May, but this reflects a typical lull ahead of the Paris Airshow—a critical event for potential order announcements.

Supply Chain Challenges: A Temporary Hurdle, Not a Roadblock

Airbus's May production of the A320neo family fell to 39 units, down from 40 in April and 46 in March, due to engine shortages from Safran. This bottleneck has resulted in 17 “gliders”—aircraft fuselages without engines—parked at its Toulouse plant. While this production dip is concerning, Airbus has mitigated its impact by prioritizing deliveries from existing inventory.

The company aims to stabilize production at 50 units/month for the A320neo family by year-end and eventually reach 75/month by 2027. While achieving this may be delayed, Airbus's backlog of 7,006 A321neo orders (as of April 2025) ensures long-term demand visibility.

Strategic Positioning for Sustained Growth

1. Backlog Strength: With 1,701 A321neos delivered out of 7,006 orders, Airbus has a multi-year revenue runway. Even if production remains constrained at 40 units/month, the backlog can support deliveries until 2030.
2. Post-Airshow Momentum: The 2025 Paris Airshow, which typically drives 30–40% of annual orders, offers a critical opportunity for new commitments. Airlines in Asia, the Middle East, and Europe are likely to seek fuel-efficient narrowbodies like the A321neo.

Historically, buying Airbus shares on the first trading day after the Paris Airshow and holding for ~3 months (60 trading days) since 2020 has shown mixed results. While the strategy captured short-term gains from Airshow-related optimism, it delivered an average annualized return of -0.53% through 2025, with a maximum drawdown of -13.87%. These figures underscore the need for caution: the stock's volatility (11.48%) and risk-adjusted performance (Sharpe ratio of -0.13) suggest investors should pair this strategy with risk management tools.

1. Competitive Edge Over Boeing: While Boeing's 737 MAX production hit its FAA-approved rate in May, its widebody programs (e.g., 777X) face certification delays. Airbus's A350, though underproduced, retains strong demand, particularly from Gulf carriers.

Investment Considerations: Risks and Opportunities

Catalysts for Growth:
- Successful Paris Airshow order wins.
- Resolution of Safran engine supply issues, enabling production ramp-up.
- Stabilization of A350 output to meet backlog demands.

Risks:
- Prolonged supply chain disruptions.
- Trade tensions with China, which accounts for 25% of Airbus's narrowbody orders.
- Overexposure to European labor costs and inflation.

Conclusion: Airbus Remains a Compelling Aerospace Play

Airbus's May deliveries demonstrate its ability to navigate supply chain turbulence while maintaining its delivery cadence. The A321neo's dominance, coupled with a robust order backlog and upcoming Airshow opportunities, positions the company to outperform in an industry still recovering from pandemic and geopolitical shocks.

Investors should view dips in production as temporary setbacks, not existential threats. With a forward price-to-earnings ratio of 12 (vs. Boeing's 18), Airbus offers attractive valuation upside if supply chain issues ease. Hold for the long term, and consider adding exposure ahead of the Paris Airshow—though historical data highlights the need to manage risk, as short-term volatility remains a factor.

Data sources: Airbus official reports, Forecast International, Reuters.