Airbus seen at risk of reaching its full-year guide of 770 deliveries

Investing.com -- Airbus (EPA:AIR ) is currently at risk of missing its full-year target of 770 aircraft deliveries, as per analysts from Bernstein in a note dated Wednesday. 

The aerospace company delivered 50 aircraft in September, bringing its total deliveries for the year to 497. To meet its annual goal, Airbus would need to deliver more than 270 aircraft in the fourth quarter, an increase from its previous performance. 

“We now see risks to reaching the full-year guide of 770 deliveries (already lowered from 800 in June), and lower our forecast to 750,” said analysts at Bernstein.

These difficulties are not new for Airbus. Over the past months, the company has grappled with a shortfall in key components, particularly engines and interior fittings, which are critical for the final assembly of aircraft. 

The supply of LEAP and GTF engines remains problematic, with manufacturers struggling to keep up with demand. 

In September, GE Aerospace warned that its LEAP engine deliveries were improving at a slower pace than expected, exacerbating Airbus's challenges. 

Similarly, the GTF engine supply has been strained by the need to provide spare engines for grounded aircraft, further delaying Airbus’s production schedules.

Airbus’s supply chain issues extend beyond engines. Delays in seat deliveries and other interior components have also hampered the company’s ability to meet its production targets. 

Spirit AeroSystems (NYSE:SPR ), one of Airbus’s major suppliers, has faced major setbacks in delivering essential components like landing gear and auxiliary power units. 

While some progress has been made, these challenges continue to slow down the production line, casting doubt on the company’s ability to achieve the necessary fourth quarter ramp-up.

Despite these difficulties, Airbus has not yet officially revised its full-year guidance and is expected to reaffirm its target during the third quarter earnings announcement. 

Historically, Airbus has managed to execute large numbers of deliveries in December, sometimes delivering over 90 aircraft in the final month of the year. 

However, should the situation not improve by early December, Airbus may be forced to adjust its delivery forecast, similar to what occurred in 2022.

Bernstein also flagged concerns for 2025 and beyond, noting that the supply chain issues could persist. 

The analysts lowered their delivery expectations for 2025 from 870 to 820 units and for 2026 from 1,000 to 910 units, suggesting that Airbus’s production ramp-up might be slower than previously anticipated.

Source: Investing.com