Airbus is dealing with serious problems concerning the supply of important parts for its airplanes, especially its biggest and smallest models.
This issue comes from Spirit AeroSystems, the company that provides these crucial components. These challenges are part of larger supply chain difficulties that are making it hard for Airbus to deliver its aircraft on time.
Airbus Faces Supply Chain Challenges
According to Reuters, airlines are likely to experience delays in receiving certain jets, especially the long-distance A350 model, next year. This is due to longer wait times for parts, leading Airbus to put more resources into ensuring they can keep making progress on their planes.
According to data released recently, Airbus needs to increase its total deliveries by 11% in the last three months of the year to meet its annual goal of delivering 770 jets. However, many analysts now expect the total number of aircraft delivered to be closer to 750 or 760.
Spirit AeroSystems mainly supplies Boeing, which is currently trying to buy back its former subsidiary. Airbus relies on Spirit for essential parts for its A350 twin-aisle jets and A220 single-aisle jets.
Concerns have been raised about manufacturing problems at Spirit's plant in Kinston, North Carolina, which produces fuselage components.
To speed up production, Airbus has taken measures such as airlifting wings for the A220 from Spirit's factory in Belfast, Northern Ireland.
In July, Airbus decided to buy two underperforming plants as Boeing began reacquiring shares of Spirit. Spirit insists that its production is on track.
To ensure production stays on schedule, Airbus has sent employees to the Kinston plant to monitor performance. Airbus has confirmed that they are closely monitoring Spirit and other suppliers, saying they have faced supply chain challenges, particularly with aerostructures.
Airbus Reports Declining Income Amid Supply Issues
Airbus has previously reported issues with the supply of engines and landing gear, and analysts warn that these problems could affect other vital components within the supply chain. In its half-year results released in July, Airbus announced a drop in net income to 825 million euros ($902 million), down from 1.526 billion euros the year before, despite a 4% increase in revenue due to more aircraft deliveries.
Experts believe that Airbus can still reach its annual delivery goal, but the company will need to ramp up operations in the final quarter. Christophe Menard from Deutsche Bank noted that September's deliveries were "lackluster" and pointed out a slowdown in the delivery of widebody aircraft, specifically the A350 and A330 models.
He mentioned that meeting the year-end delivery targets will be challenging but still possible.
Citi analysts emphasized that a rise in production during October is crucial to hit that target. They acknowledged that while the annual delivery goal of 770 jets is still possible, the recent drop in deliveries makes it less likely. They predict Airbus might adjust its target to 750-760 jets in its upcoming quarterly results, according to CNBC.
