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Airbus backs delivery target despite supply constraints

Airbus has backed up to meet its goal of delivering about 700 planes by the end of the year, but warned it would be “anything but a walk in the park” as the airline industry continues to battle supply chain restrictions.

The world’s largest aircraft maker said Friday it was grappling with “multiple crises,” but supply chain issues were the biggest challenge.

Like other global manufacturers, Airbus has struggled with shortages of raw materials, electronic components and labor availability, just as demand has recovered in the wake of the coronavirus pandemic. Rising inflation, uncertainty about the war in Ukraine and energy costs have added to the pressure.

Dominik Asam, Airbus’ chief financial officer, said the company had delivered 382 aircraft by the end of August, leaving about 320 aircraft to be delivered to reach the target.

The company, Asam told a capital markets briefing Friday, was “fully committed” to meeting its commitments, “but against the backdrop of disruptions in global supply chains, delivering about 700 aircraft by 2022 is anything but a walk in the park”.

Airbus lowered its original year-end delivery target from 720 to “about 700” aircraft in July. It has also adjusted the planned output of its best-selling A320 family of jets for this year and next. The company said it was aiming for 65 monthly production by early 2024 — about six months later than originally forecast. However, Airbus said at the time it was sticking to its plan to reach a monthly rate of 75 jets by 2025.

Guillaume Faury, CEO of Airbus, reiterated the rate of 75 jets per month on Friday. The company expects to produce about 50 per month by the end of this year.

“Based on the visibility we have of the supply chain now, we think it’s manageable, but I won’t tell you it’s easy,” Faury said of the 700-plane target. “There is an enormous amount of work to be done,” he added, pointing out that Airbus expects the crisis to last until next year.

However, the bottleneck in engine supply, which has been a source of friction between Airbus and engine manufacturers, including CFM International, a joint venture between Safran and GE, is easing. The number of “gliders” — planes built but without engines in storage — had been reduced to single digits as of July 26, Faury said.

The company has agreed engine volumes with both CFM International and Pratt & Whitney for 2023 and 2024, and has begun talks on 2025 figures.

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