Slow Airbus deliveries raise fresh questions over annual target Reuters

By Tim Hepher

PARIS (Reuters) – Airbus deliveries are closing in September at a slower pace than a year ago, raising questions about its ability to meet a revised annual target, analysts and industry sources said.

In July, Airbus issued a profit warning and cut its full-year delivery target to 770 aircraft from 800, blaming a shortage of engines and other items. It pushed back a base production target by a year to 2027.

Delays in deliveries and ramping up production of the basic narrow-body jets have sparked growing impatience inside Airbus, with Chief Executive Guillaume Faury expressing frustration with generally erratic production, people familiar with the company said.

Airbus has delivered about 30 aircraft so far in September, bringing it to about 477 planes this year, according to data provided to Reuters by consultancy Cirium Ascend.

If Airbus continues at this pace, then it could end the month with about 36 deliveries, or 483 since the start of the year – below the 488 seen in the nine-month phase a year ago, it showed.

Airbus delivered 55 planes last September.

“They’ve been very close to the cumulative 2023 numbers all year, which further supports the assumption that it may evolve that they won’t reach 770,” said Rob Morris, head of global consulting at Cirium Ascend.

An Airbus spokesman referred to its latest guidance.

Airbus has a habit of springing surprises in the fourth quarter, although supply chain and internal manufacturing issues have increasingly hampered its ability to catch up.

“Given the performance so far this year, it looks like the risk is more to the downside than to the upside,” Agency Partners analyst Sash Tusa said, adding that concerns remained about core output growth beyond 2024 .

Airbus said it was targeting “roughly” 770 deliveries, meaning it could rely on that margin to avoid another cut in official guidance that could be seen as a blow to its senior management, they said the analysts.

Airbus is producing an average of about 50 of the benchmark A320neo narrowbody a month, little changed from a year ago based on tracking test flights, Morris said.

The recent failure to make significant progress toward a medium-term target of 75 a month has increased internal pressure to hold on to cash as Airbus stores inventory to preserve flexibility, sources familiar with the matter said.

Airbus launched a belt-tightening and performance improvement plan called LEAD in July! Christian Scherer, the general manager of aircraft production, warned staff that unit costs were rising faster than unit revenues.

The plan’s first goal is to “save 2024 in terms of supplies,” he said in a July memo seen by Reuters, adding that he would “turn over every stone” and examine costs without taboo.