Airbus Cuts Commercial Aircraft Production Targets, Records Space Charges

SEATTLE—Airbus no longer expects to reach its target of producing 75 A320neo family aircraft per month in 2026 and has cut back its delivery guidance for 2024.

The decisions come as the manufacturer is suffering from renewed constraints in its supply chain that make the targets unrealistic. Airbus now expects to reach rate 75 in 2027, one year later than planned of late. The company had already pushed out the target before because of supply chain issues. In 2024, Airbus now aims to deliver 770 commercial aircraft, about 30 less than it had anticipated so far.

The cutbacks have severe financial implications for the company. Airbus now expects an adjusted operating profit of €5.5 billion ($5.8 billion), down from €6.5-7 billion.

For airlines and lessors, the latest admissions mean more delays for hundreds of aircraft over the next several years. Customers have already been complaining about receiving A320neo family aircraft routinely several months late. The continued and now aggravated scarcity of supply will likely support the already high lease rates further and could slow down retirements even more when many airlines are already operating aging aircraft longer than expected.

The delay also means that Airbus cannot grow its share in the single aisle market vis-à-vis Boeing as fast as planned in the coming three years.

Airbus said the decision reflects “specific supply chain challenges in a degraded operating environment.” It is “facing persistent specific supply chain issues mainly in engines, aerostructures and cabin equipment.”

The company also conducted technical reviews of all space programs and identified “further commercial and technical challenges,” Airbus said without revealing further details. It is recording €0.9 billion in charges as a consequence in the first half of the year. Airbus will disclose its second quarter results on July 30.

Airbus did not reveal changes to the ramp-up planned for the A220. The program plans to go up to 14 aircraft by the middle of the decade.

The supply chain remains “very constrained,” Airbus sales chief Benoit de Saint-Exupery told Aviation Week in a recent interview. He added that there are “many areas of friction,” therefore “we are not out of the woods yet, for sure.”

“Would I like to have more aircraft being produced in due course? Yes, of course, because right now the market would actually take everything,” de Saint-Exupery said. In that conversation, he was even looking beyond rate 75: “I’m conscious that we will have to get there first in a reliable and stable way, sustain that, and then we will see whether we can do something else,” de Saint-Exupery said. “The market would take more than that today for sure.”

Deliveries of Pratt & Whitney PW1100G engines have been constrained, as the engine OEM has to service the in-service fleet with a much larger number of replacement engines to contain fleet groundings caused by various maturity issues. CFM International has also had challenges in ramping up production.

Airbus did not say where exactly the shortages in aerostructures lie. Unlike cabin equipment and engines, a lot of the aerostructures work is performed in-house or at suppliers owned by Airbus. The OEM is also understood to be close to taking over parts of Spirit AeroSystems, a key supplier on the A220 and A350 programs.

Issues in the cabin supply chain have worsened recently, industry sources say. Delays in deliveries and certification of seats have become a particularly serious problem, sometimes pushing back aircraft handovers by several weeks or months. Cabin monuments such as galleys and lavatories or their parts have also not arrived at the pace expected.