Airbus Deliveries Stall in October, Setting Up Scramble to Hit Year-End Target
(Bloomberg) -- Airbus SE delivered about 35 planes in October, according to people familiar with the matter, as the impact of supplier delays worsened.
The slowdown represents a step in the wrong direction for the European planemaker, which is pushing an ambitious production ramp-up that some parts-makers and customers have questioned. The company may have come close to September’s result of 40 aircraft, one of the people said.
The drop, if confirmed when Airbus publishes monthly results on Friday, would represent its slowest month for deliveries since February. Airbus declined to comment on the October results.
Chief Executive Officer Guillaume Faury flagged the ongoing issues last week, when Airbus reported third-quarter results. He said then that the company is having difficulties with on-time deliveries from a small number of suppliers, blaming them for September’s disappointing showing and saying those issues would likely also hit October handovers.
Shares of Airbus rose 0.9% to 109 euros at the close of trading Thursday in Paris.
Supply Chain Strain
Airbus is readying its supply chain for build rates as high as 75 a month for its top-selling A320 single-aisle series by 2025. But the supply chain is showing signs of strain, after parts makers shed staff and ran down reserves during the downturn caused by the coronavirus crisis.
The company is looking to extend its lead over U.S. rival Boeing Co., but some lessors and enginemakers have pushed back against the longer-range plans. Raytheon Technologies Corp. Chief Executive Officer Greg Hayes said last week that he wasn’t sure the market would support 75 a month.
Airbus targets delivering 600 planes by year-end, and October’s sluggish result leaves the company with some 141 jets to get out the door in the final two months. While a year-end push is a normal part of the company’s operations, the supply chain woes could make that harder than usual.
The company is still on track to meet the goal, the people said, asking not to be named before the monthly figures are announced. It will likely mean working between Christmas and New Year, they said.
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