Airbus bids to stabilise supply and production capabilities
Aircraft manufacturer, Airbus, has announced a deal for the potential acquisition of various production functions related to its operations at a range of locations around the world.
The group 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.
Last week it issued a revised, reduced, forecast for its 2024 financial year in which it admitted that its commercial aircraft business is being impacted by “persistent specific supply chain issues,” mainly in engines, aerostructures and cabin equipment.
The company revealed that it now intends to deliver around 770 commercial aircraft in 2024 and continue to ramp up towards a rate of 75 A320 family aircraft per month, which is now expected in 2027. It also expects 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
Today (July 1), the group appears to be aiming to stabilise its production capabilities by entering into a binding term sheet agreement with Spirit AeroSystems in relation to a potential acquisition of major activities related to Airbus, notably the production of A350 fuselage sections in Kinston, North Carolina, US, and St Nazaire, France; of the A220’s wings and mid-fuselage in Belfast, Northern Ireland, and Casablanca, Morocco; as well as of the A220 pylons in Wichita, Kansas, US.
With this agreement, Airbus said it aims to ensure stability of supply for its commercial aircraft programmes through a more sustainable way forward, both operationally and financially, for the various Airbus work packages that Spirit AeroSystems is responsible for today.
The transaction would cover the acquisition of these activities.
Airbus will be compensated by payment of $559m from Spirit AeroSystems, for a nominal consideration of $1, subject to adjustments including based on the final transaction perimeter.
Entering into definitive agreements remains subject to an ensuing due diligence process.
Airbus said that, while there is no guarantee that a transaction will be concluded, all parties are willing and interested to work in good faith to progress and complete this process as timely as possible.
