Airbus drops delivery target as production stalls
Airbus revised its full-year delivery goal for commercial jets this morning, as the plane manufacturer continued to suffer with delays at a newly expanded German plant.
Europe’s largest aerospace group now hopes to deliver around 860 airliners in 2019 instead of the 880-890 previously targeted.
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In order to achieve the new 2019 goal, Airbus still needs to hand over 289 planes in the final quarter. The aerospace giant’s record for deliveries in a quarter is 297, which it managed in the same period last year.
However, influential industry executive John Plueger, the head of Air Lease Corp, told Airfinance Journal Asia Pacific 2019 that problems at Airbus’s Hamburg plant were “getting worse, not better.”
The company posted €1.6bn (£1.38bn) in operating income for the third quarter, with adjusted operating profit two per cent higher year-on-year.
Quarterly revenue fell one per cent to €15.3bn and net income rose three per cent to €989m. The group also trimmed its 2019 free cash flow goal to reflect the revised delivery outlook.
Chief Executive Guillaume Faury said the revised numbers “reflect the underlying actions to secure a more efficient delivery flow in the next years.”
He also took the chance to call for a negotiated settlement to the ongoing trade dispute with the US, which has seen European planemakers hit with 10 per cent tariffs.
He warned that the situation “will become much more difficult” if tariffs continue to impact planes delivered in the latter half of 2020 and beyond.
“Tariffs will have to be incurred by customers or airplanes not delivered. It’s really creating tension,” he said.
Asked about Plueger’s comments, Faury said: “It’s very difficult to recover once we are late.”
Delays at Airbus’ Hamburg plant have been a constant for nearly two years as it increases production of the A321 ACF, a jet with larger fuel tanks and flexible cabin layouts.
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Bernstein analyst Douglas Harned told Reuters that the reduced goal was “not a huge surprise” in light of weaker January-September deliveries announced earlier this month.
“A321 ACF challenges are expected to persist, with management hinting that the ramp-up will continue through 2020,” he added.
Airbus shares were flat at €125.7 in early trading.
Main image credit: Getty