Airbus softens output goal in supply dispute with Pratt & Whitney

By Tim Hepher and Benjamin Mallet

PARIS, Feb 19 (Reuters) - Airbus softened its main jet production target on Thursday, blaming engine maker Pratt & Whitney for failing to strike a crucial supply agreement, in the latest sign of tension between planemakers and their main suppliers over shortages.

The world's largest planemaker said it was facing "significant shortages" of engines from the RTX engine subsidiary, which faces competition for scarce parts after being hit by a backlog of inspections following a production problem.

The European aerospace group now targets a narrowbody output rate of between 70 and 75 jets a month by the end of next year, stabilising at 75 a month beyond 2027. It had previously predicted a monthly rate of 75 in 2027, up from around 60 now.

Airbus has been at odds with suppliers including Pratt & Whitney over delays for months, and the two companies have said they have yet to conclude a deal on volumes for either 2026 or 2027. Usually such agreements are set some 18 months ahead.

In unusually public criticism of a major supplier issued together with its full-year results, Airbus said that Pratt & Whitney’s "failure to commit to the number of engines ordered by Airbus is negatively impacting this year’s guidance and the ramp-up trajectory".

Pratt & Whitney parent RTX declined comment.

HIGHER PROFITS

Also on Thursday, Airbus posted fourth-quarter adjusted operating profit of 2.98 billion euros, up 17%, as revenue rose 5% to 25.98 billion euros. Analysts were on average expecting profit of 2.87 billion euros on revenues of 26.51 billion euros.

For 2026, Airbus predicted 870 jet deliveries, up from 793 last year, and adjusted operating profit around 7.5 billion euros.

The output setback comes after Reuters reported earlier this month that concerns over Pratt & Whitney supplies had raised doubts on whether Airbus could stick to production goals.

The Connecticut-based company makes engines for 40% of Airbus narrowbody A320neo-series jets. The engine industry has been struggling to gain speed following the COVID-19 pandemic.

After sparring with its largest engine supplier CFM over delays just over a year ago, Airbus first went public with concerns over Pratt & Whitney shipments in January.

Last week CFM indicated it was not ready to wade into the worsening dispute between Airbus and Pratt & Whitney by boosting its own deliveries to Airbus, saying its priority was to meet its existing supply commitments.

Pratt & Whitney Commercial Engines President Rick Deurloo said at the Singapore Airshow this month that the company was in constant dialogue with Airbus and was confident of reaching agreement.

RTX CEO Chris Calio told analysts in late January that Pratt & Whitney had to strike the right balance given demand from airlines, but stressed overall deliveries rose 50% last year.

Engines are not the only industrial problem for Airbus. In December, it cut delivery forecasts after flaws were discovered in panels from a Spanish supplier.

(Additional reporting by Michal Aleksandrowicz; Editing by Muralikumar Anantharaman and Sonali Paul)