Airbus Lowers Targets and Takes Charge for Space Activities
In a move to address supply disruptions and commercial risks, Airbus has adjusted its key industrial and financial targets. The aerospace giant has taken a significant €900-million charge for its troubled space activities as it aims to reset its approach, as reported by Reuters.
Delivery Forecasts and Production Adjustments
Acknowledging skepticism among suppliers, Airbus has revised its delivery forecast for this year to around 770 jets, down from the initial estimate of around 800. The company has also delayed its plans to increase production of the A320neo family, pushing back the target production speed of 75 jets a month to 2027 from 2026.
This adjustment reflects a more conservative growth outlook, with Airbus now targeting underlying operating income of around 5.5 billion euros and free cashflow of 3.5 billion for 2024, down from the previous range of 6.5 billion to 7 billion.
Challenges in the Aerospace Industry
The aerospace industry continues to face challenges in stabilizing supplies and rehiring workers following the impact of the pandemic. Airbus has been particularly affected by engine shortages, with CEO Guillaume Faury highlighting significant disruptions in the supply chain for A320neo engines.
Supplier Doubts and Potential Deals
While Airbus grapples with supply chain issues, some experts and suppliers have raised doubts about the company’s ambitious plans. Faury hinted at potential penalties for engine makers facing delays, with ongoing discussions surrounding deals with suppliers like Spirit Aerosystems and Boeing.
Boeing’s proposed acquisition of Spirit has seen developments, with reports suggesting a potential shift from an all-cash deal to a stock-funded acquisition. The uncertainty surrounding industrial commitments from suppliers like Spirit has contributed to Airbus’ revised targets.
Ongoing Challenges
Airbus continues to navigate challenges in securing components like seats and cabin parts, with Christian Scherer highlighting engines, landing gear, and cabin components as key problem areas. Meanwhile, a strike at a Safran factory in Canada has impacted landing gear production for Airbus and Boeing.