Airbus Notifies Airlines of Potential Delivery Delays Beyond 2024 Amid Supply-Chain Challenges

Airbus SE is informing airlines of potential delivery delays for aircraft slated for 2025 and 2026 due to ongoing supply-chain issues. These setbacks follow the company's recent reduction of its delivery and production forecasts, citing shortages in components such as engines and interior fittings. This extension beyond current years compounds the challenges faced by Airbus, as it struggles to meet strong demand and adapts to geopolitical tensions. Despite these difficulties, Airbus remains committed to its long-term orders, with a sold-out inventory until the end of the decade.

Airbus SE, the European aerospace giant, is grappling with fresh challenges in its aircraft delivery schedule, with potential delays for planes slated for 2025 and 2026 [1]. These setbacks are a result of ongoing supply chain issues, which have already compelled the company to reduce its delivery and production forecasts for 2024 [1].

The company's woes extend beyond the current year, as the persistent shortages in components such as engines and interior fittings are now pushing back delivery dates for planes that were scheduled for delivery in the coming years [1]. This development adds to the existing challenges faced by Airbus as it strives to meet strong demand and adapt to geopolitical tensions [1].

Despite these challenges, Airbus remains committed to its long-term orders, with a sold-out inventory until the end of the decade [1]. However, the extended delivery timelines could potentially impact customer satisfaction and the company's financial performance.

The recent reduction in Airbus' delivery target is not an isolated incident. The company had previously announced a goal to produce 75 A320 single-aisle jets per month by 2027, but this timeline has now been pushed back by one year [3]. Furthermore, Airbus is reportedly in talks with Spirit AeroSystems Holdings Inc. to acquire parts of the aerospace supplier's business, which could potentially alleviate some of the supply chain bottlenecks [2].

Airbus' financial performance has also been affected by these challenges. The company has revised its earnings before interest and tax (EBIT) forecast for 2024 to €5.5 billion, down from a previous goal of €7 billion [1]. Additionally, the company now expects adjusted free cash flow before customer financing to be around €3.5 billion, compared to its previous projection of around €6.5 billion [1].

In conclusion, Airbus SE is facing fresh challenges in its delivery schedule as a result of ongoing supply chain issues. These setbacks are likely to impact the company's financial performance and customer satisfaction in the short term, while the long-term implications remain to be seen.

References:
[1] Bloomberg. Airbus Cuts Delivery Goal, Slows A320 Build Rate in Setback. 24 June 2024. https://www.bloomberg.com/news/articles/2024-06-24/airbus-cuts-delivery-goal-slows-a320-build-rate-in-setback
[2] Investing.com. Airbus Issues Profit Warning Due to Delivery Delays; Deutsche Cuts Stock Rating. 24 June 2024. https://www.investing.com/news/company-news/airbus-issues-profit-warning-due-to-delivery-delays-deutsche-cuts-stock-rating-93CH-3495552
[3] Supply Chain 360. Airbus SE Revises Financial and Delivery Forecasts Amid Supply Chain Challenges. 24 June 2024. https://supplychain360.io/airbus-se-revises-financial-delivery-forecasts-amid-supply-chain-challenges/