Airbus Faces Challenges in Meeting 2023 Delivery Goals
Airbus at Risk of Missing Annual Target for Aircraft Deliveries
Airbus is navigating turbulent waters this year, with the potential to fall short of its ambitious target of delivering 770 aircraft. Industry analysts from Bernstein expressed concerns about this trajectory in a recent evaluation. This warning follows the company's September report, which revealed only 50 aircraft delivered during that month, totaling 497 for the year.
Delivery Needs for the Final Quarter
To stay on course and achieve its annual target, Airbus would need to ramp up deliveries significantly, requiring more than 270 aircraft to be delivered in the fourth quarter alone. This is a challenging task given the operational hurdles the company has faced. Bernstein has revised its delivery expectations downward to 750 aircraft, citing these ongoing challenges.
Supply Chain Disruptions Affecting Production
The obstacles Airbus faces with its supply chain are not new. In recent months, the company has struggled with a shortage of vital components, particularly engines and interior fittings, crucial for the assembly of new aircraft. The delivery of LEAP and GTF engines has been particularly troublesome, with manufacturers unable to meet the rising demand.
Issues with Engine Deliveries
In September, GE Aerospace reported slower-than-expected improvements in the delivery of its LEAP engines, further complicating Airbus's situation. Similarly, the GTF engine supply chain is strained due to an increase in demand for spare engines needed for grounded aircraft. This situation adds to the ongoing delays in Airbus’s production timelines.
Interior Component Setbacks
But engine deliveries are just part of the problem. Delays in the provision of seats and other critical interior components have also hindered Airbus's ability to meet its production targets effectively. One of the significant suppliers, Spirit AeroSystems, has encountered major issues in providing essential parts like landing gear and auxiliary power units, slowing down Airbus’s production line.
Future Outlook for Airbus
Despite the serious concerns, Airbus has not officially revised its full-year guidance yet. The company is expected to reaffirm its delivery target in the upcoming third-quarter earnings report. Historically, Airbus has had a strong finish in December, often completing over 90 deliveries in the month. However, should these issues persist into early December, the company might have to adjust its forecasts similar to past experiences.
Long-term Projections
Looking further ahead, concerns linger even for 2025 and beyond. Bernstein analysts have adjusted their previous expectations for Airbus, lowering the delivery estimates for 2025 from 870 units to 820, and for 2026 from 1,000 to 910. This indicates that the ramp-up of production may be slower than originally anticipated, potentially affecting Airbus’s long-term plans.
Frequently Asked Questions
What is Airbus’s current delivery target for the year?
Airbus aims to deliver 770 aircraft by the end of the year but may fall short due to ongoing challenges.
How many aircraft has Airbus delivered so far this year?
As of September, Airbus has delivered a total of 497 aircraft in 2023.
What major issues are Airbus facing with their aircraft production?
Airbus is experiencing supply chain disruptions, particularly with engine availability and interior component delays, impacting their production schedule.
Is Airbus expected to meet its delivery goals in December?
While Airbus has historically had strong December deliveries, the current production challenges may jeopardize meeting their targets.
How have long-term delivery forecasts changed for Airbus?
Analysts have lowered Airbus’s delivery expectations for the coming years, projecting slower production ramp-ups than previously estimated.
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