Airbus lowers annual forecast and reveals ‘persistent specific supply chain issues’

Airbus has lowered its guidance forecast for 2024, today (June 25), and revealed its commercial aircraft business is being impacted by “persistent specific supply chain issues”.

The aircraft manufacturer has major plants in Broughton, near Chester, where it employs 5,000 staff making wings for its commercial aircraft, and Filton, in Bristol, where the workforce numbers 3,000 staff.

It has included new developments related to its space activities, as well as its commercial aircraft business, in today’s updated forecast.

In the first half of 2024, the Space Systems management team conducted an extensive technical review of all programmes, identifying further commercial and technical challenges. On that basis, the company has decided to record charges of around €0.9bn in the first half of 2024 accounts.

These are mainly related to updated assumptions on schedules, workload, sourcing, risks and costs over the lifetime of certain telecommunications, navigation and observation programmes.

In commercial aircraft, Airbus said it is facing persistent specific supply chain issues mainly in engines, aerostructures and cabin equipment.

The company now intends to deliver around 770 commercial aircraft in 2024 and continues to ramp up towards a rate of 75 A320 family aircraft per month, which is now expected in 2027.

Accordingly, Airbus is updating its 2024 guidance.

As the basis for its updated 2024 guidance, the company assumes no additional disruptions to the world economy, air traffic, the supply chain, the company’s internal operations, and its ability to deliver products and services.

The 2024 guidance is before mergers and acquisitions.

On that basis, in 2024, the company now targets to achieve around 770 commercial aircraft deliveries, EBIT Adjusted of around €5.5 bn, and free cash flow before customer financing of around €3.5bn.

That compares with its previous forecast, issued with its first quarter figures in April this year, of a target of around 800 commercial aircraft deliveries, EBIT Adjusted of between €6.5bn and €7bn, and free cash flow before customer financing of around €4bn

Back in April the manufacturer bemoaned the sluggish sector which resulted in a fall in first quarter earnings – despite a growth in revenues – during which it said the sector had shown no signs of improvement.

The company’s half-year results will be disclosed on July 30, 2024.