Airbus shares plummeted on Tuesday after the world's largest aircraft manufacturer lowered its annual profit forecast and postponed production targets due to ongoing supply chain disruptions.
The European aerospace company has been struggling with delivery delays since the corona pandemic, but CEO Guillaume Faury alarmed investors with the warning that a shortage of engines is once again a "significant problem.
These new bottlenecks mean that Airbus is expected to deliver "around 770" commercial aircraft this year, instead of the previously forecasted 800. Additionally, the company postponed its goal of producing 75 aircraft per month of the best-selling A320 family from 2026 to 2027.
Unlike in 2022, when Airbus last struggled with engine defects, the company is now facing shortages from both Pratt & Whitney and CFM International, both suppliers for the A320.
This is a new situation that we did not expect," said Faury, who issued the warning after the stock market closed in Paris on Monday. "Engines that were not a problem in 2023 and early 2024 are now again presenting a significant issue.
Cabin components are also in short supply, Faury added, as many airlines are upgrading older aircraft due to difficulties in acquiring new ones.
Airbus shares fell by 12 percent in the afternoon. The warning weighed on the entire aviation sector, with shares of engine manufacturer Rolls-Royce down 4 percent and those of aviation supplier Melrose Industries down 3 percent.
Airbus has been suffering from supply chain constraints for two years, hindering the company's ambitions to meet the renewed demand for new airplanes post-pandemic.
The continuation of supply chain issues in commercial aircraft contradicts the narrative of gradual improvement," noted Robert Stallard, analyst at Vertical Research Partners.
That even the extremely conservative Airbus misjudged this forecast is a sign of how challenging this supply chain situation is and calls the production plans of the original equipment manufacturers into question once again," he added.
It is the second time since 2022 that Airbus has had to delay its annual delivery targets. Faury said at an aviation summit in Berlin earlier this month that he expects supply chain bottlenecks in the industry to last another two to three years.
Airbus also announced that the company will record a write-down of approximately 900 million euros in the first half of the year in connection with its space systems business, following a review of long-term programs by the new management.
Complex and demanding products" were mentioned that brought development risks. The company will "evaluate all strategic options, such as potential restructurings, cooperation models, portfolio reviews, and M&A options.
The aerospace company now expects an adjusted earnings before interest and taxes of 5.5 billion euros this year, compared to a previous forecast of up to 7 billion euros. Airbus will announce its half-year results on July 30.
The warning came as Airbus was on the verge of an agreement with Spirit AeroSystems to take over the work of the US supplier for some of its programs, particularly with the A220 and A350 aircraft. An agreement would pave the way for Boeing to take over the majority of Spirit, including its operations in Kansas.
Boeing has been in talks with Spirit since March as the US plane maker seeks to improve the supplier's manufacturing processes after a fuselage section of one of its 737 Max planes ruptured mid-air in January. Spirit supplies Boeing with fuselages and both companies are currently being scrutinized by the US aviation safety authority.
