Airbus trims delivery target, slows jet output hike

By Tim Hepher

PARIS (Reuters) -Airbus shaved its annual jet delivery forecast and slowed a planned increase in factory production while sticking to core financial goals on Wednesday, after disruption in the global supply chain put a brake on second-quarter profits.

The planemaker lowered its 2022 delivery goal to 700 jets from 720 and said it would reach interim production of 65 narrowbody jets a month in early 2024 instead of summer 2023, on its way to an unchanged target of 75 a month in 2025.

The move comes after the world’s largest planemaker recorded flat deliveries for the first half as delayed engine deliveries compounded parts shortages and problems in hiring back staff to aerospace after lay-offs during the pandemic.

Even so, Airbus reaffirmed its 2022 profit and cashflow forecasts after reporting second-quarter adjusted operating profit of 1.382 billion euros, down 31%, on revenues which fell 10% to 12.810 billion.

Analysts were on average expecting adjusted second-quarter operating income of 1.328 billion euros on revenues of 13.7 billion, according to a company-compiled consensus.

While pushing back the initial phase of a planned increase in narrowbody production by about 6 months, Airbus said it was exploring with suppliers a further increase in production of larger wide-body jets as international air travel recovers.

It took a 200-million-euro inflation-related hit on the A400M military airlifter, adding to a long list of charges for the multinational defence programme, but said it had revised down its assessment of the impact of sanctions against Russia following “good progress” in re-marketing some civil jets.

Airbus reiterated the timeline for its A321XLR jet, the latest version of its best-selling single-aisle A320 family, which it had recently pushed back by three months to early 2024.

A quarterly results statement did not give an immediate update on a disagreement with regulators over the design of the plane’s underbelly, which will house a new kind of fuel tank.

Supply chain concerns dominated last week’s Farnborough Airshow where suppliers and manufacturers said they were scrambling to source everything from raw materials to small electronic components to keep production moving.

For months, Airbus has been relatively upbeat on single-aisle output as demand rebounds more quickly than some expected, though some suppliers question how easy it will be to pull off what remains the steepest increase in the industry’s history.

Rival Boeing, which also reported earnings on Wednesday, said it saw “real constraints” in the supply chain and that it was increasing its on-site presence at suppliers’ factories.

(Reporting by Tim Hepher; Editing by Jan Harvey and Jane Merriman)