Airbus upbeat on deliveries after strong Q2, softens tone in engine dispute
By Tim Hepher and Florence Loeve
Airbus Q2 Results and Industry Outlook
PARIS, July 29 (Reuters) - Airbus voiced increasing confidence in its critical jet delivery target and maintained other 2026 goals as it unveiled stronger-than-expected second-quarter results on Wednesday, lifted by commercial airliner output and gains in defence.
Jet Delivery Targets and Engine Dispute
CEO Guillaume Faury said the target for an industry record of "around 870" jet deliveries this year was consistent with as many as 890 and struck a more conciliatory tone in a dispute with Pratt & Whitney over engine supplies.
Airbus and the RTX subsidiary have been at odds for months over shortages of engines that the planemaker blames in part for uneven output, with Faury launching a rare public criticism earlier this year.
Resolution Efforts and Industry Response
"It's no longer a topic for 2026, and we are working to resolve the dispute as much as we can in a constructive manner...and (it's) something we need to put behind us at a point in time," Faury told reporters, adding that Airbus hoped Pratt would fulfil its commitments for 2027.
RTX declined to comment.
Pratt & Whitney Commercial President Rick Deurloo told the Farnborough Airshow last week that delays in engine maintenance, which have fed back to lower quantities of engines being left over for new plane production, was easing.
Financial Performance
Airbus said second-quarter adjusted operating profit rose 54% to 2.43 billion euros as revenues gained 28% to 20.53 billion. Analysts were on average expecting the profit figure to come in at 2.19 billion euros on revenues of 20.25 billion.
Airbus delivered a record 237 aircraft in the second quarter, up 39% from the same period last year, after catching up on engine shipments and a snag in deliveries to China.
Analyst Perspectives
"We expect the trend to continue as Airbus progresses toward the annual guidance and works through capacity increases," Bernstein analyst Douglas Harned said in a note.
For the full year, Airbus reaffirmed targets including an adjusted operating profit of 7.5 billion euros.
DEFENCE BOOST
Defence and Space Performance
Airbus has a "high degree of confidence" in the target of around 870 deliveries, Faury told reporters. Reuters reported this month that Airbus had informally set an internal goal above 900 deliveries, while keeping its official guidance intact.
Airbus said quarterly profit in Defence and Space jumped 90% to 357 million euros, driven both by higher volumes and better margins as Europe's spending drive continues but cautioned that profitability would not automatically stay as high.
Competitive Landscape
Rival Boeing on Tuesday reported a larger-than-expected quarterly loss but generated positive free cashflow.
The two planemakers are researching new single-aisle aircraft to enter service around the end of next decade, though Faury has hinted at a faster timetable as Boeing focuses on cutting debt.
Trade Tensions and Future Funding
The launch of new developments risks rekindling trade tensions after Boeing complained to the U.S. government over a 3 billion euro European Investment Bank loan for Airbus, which the European firm has defended as a market-based transaction.
Asked if Airbus was in talks about fresh loans from European governments, Faury said the question of how the next generation of jets would be funded was "not on my radar as we speak".
The two sides waged a 17-year dispute over mutual claims of illegal subsidies including loans and grants at the World Trade Organisation before calling a truce that was renewed last month.
(Reporting by Tim Hepher and Florence Loeve)
