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Airbus backs delivery target despite supply constraints

Airbus has backed itself to meet its target of delivering about 700 aircraft by the end of the year but warned it would be “anything but a walk in the park” as the aviation industry continues to battle supply chain constraints.

The world’s largest plane maker said on Friday that it was grappling with “multiple crises” but that issues around the supply chain were its greatest challenge.

Like other global manufacturers, Airbus has struggled with shortages of raw materials, electronic components and the availability of labour, just as demand has rebounded in the wake of the coronavirus pandemic. Soaring inflation, uncertainty over the war in Ukraine and energy costs have deepened the pressures.

Dominik Asam, Airbus chief financial officer, said the company had delivered 382 aircraft through to the end of August, leaving about 320 planes still to be delivered to meet the target.

The company, Asam told a capital markets briefing on Friday, was “fully engaged” to deliver on its commitments, “yet against the backdrop of disruptions in global supply chains, delivering around 700 aircraft in 2022 is anything but a walk in the park”.

Airbus in July cut its original year-end delivery target from 720 to “around 700” aircraft. It also adjusted the planned output of its best-selling A320 family of jets for this year and next. The company said it was targeting a monthly production rate of 65 in early 2024 — some six months later than originally forecast. Airbus at the time, however, said it was sticking with its plan to get to a monthly rate of 75 jets by 2025.

Guillaume Faury, Airbus chief executive, on Friday reiterated the rate of 75 jets a month. The company expects to be producing about 50 a month by the end of this year.

“Based on the visibility we have now from the supply chain we think it’s manageable, but I will not tell you that it’s easy,” Faury said of the 700-plane target. “There’s a hell of a lot of work to be done,” he added, noting that Airbus expects the crisis to persist into next year.

The bottleneck in the supply of engines, however, which has been a cause of friction between Airbus and engine makers including CFM International, a joint venture between Safran and GE, is easing. The number of “gliders” — aircraft that have been built but are sitting in storage without engines — had reduced to single figures, said Faury, from 26 in July.

The company has reached agreement on engine volumes with both CFM International and Pratt & Whitney for 2023 and 2024 and had started talks about numbers for 2025.

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