Jul 27, 2022
Airbus Cuts Delivery Goal, Slows Ramp-Up on Supply-Chain Woes
, Bloomberg News
(Bloomberg) -- Airbus SE cut its jetliner-delivery goal and slowed a ramp-up in production of its best-selling narrow-body model as supply-chain issues affecting everything from engines to microchips show no sign of easing.
The world’s biggest planemaker now aims to hand over around 700 aircraft in 2022, compared with an earlier target of 720, it said in a statement Wednesday. A build rate of 65 a month for the A320 single-aisle family previously targeted for next summer won’t now be achieved until early 2024.
The revisions shouldn’t hit Airbus’s financial performance in the short term, with the company reiterating full-year estimates for earnings and cash, but indicate significant challenges in boosting output in an economic environment beset by labor and materials shortages. A slower increase in A320 production also means a five-year order backlog may take longer to clear, impacting existing clients and potentially hurting the firm’s ability to win new business.
Airbus posted adjusted earnings before interest and tax of 2.64 billion euros ($2.7 billion) for the first half, 2% lower than a year earlier. Analysts had forecast a profit of 2.55 billion euros, based on data compiled by Bloomberg.
The figure should reach 5.5 billion euros for the whole of 2022, up from 4.9 billion euros in 2021. Free cash flow is expected to amount to 3.5 billion euros before customer financing and acquisitions, about equal to last year.
The planemaker said it still plans to build 75 A320s a month in 2025. The pressure to lift production was evident at this month’s Farnborough International Airshow, where Airbus had a lackluster sales performance as rival Boeing Co., which has smaller backlogs, announced blockbuster deals from carriers like Delta Air Lines Inc.
Chief Executive Officer Guillaume Faury revealed at the expo that Airbus had 26 planes built but waiting on the tarmac without engines at the end of June. Airbus is also contending with energy shortfalls as gas supplies are threatened by fallout from Russia’s invasion of Ukraine.
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