Airbus is currently grappling with significant production and delivery challenges for its A350 aircraft, primarily due to supply chain disruptions linked to Spirit AeroSystems, which has resulted in delays and lower-than-expected output. The manufacturer announced plans to ramp up production of the A350 to 12 aircraft per month by 2028, but recent obstacles suggest this timeline may not be met.
According to Airbus, the goal was to increase A350 deliveries to approximately nine per month starting next year; nevertheless, the current forecast stands at just six per month for 2025. This alteration is largely attributed to the aforementioned supply chain challenges, which have hindered the attainment of more ambitious production targets.
Airbus CEO Guillaume Faury highlighted the company’s resilience and its focus on adjusting production rates as needed. “We achieved strong order intake across all businesses in 2024, with our overall backlog amounting to 8,658 commercial aircraft as of year-end,” Faury stated. The company delivered 766 commercial aircraft throughout 2024, which marks progress but still leaves gaps as management aims for profit growth amid challenging market conditions.
Recent financial reports showcased consolidated revenues of €69.2 billion for 2024, up from €65.4 billion the previous year. Airbus also recorded earnings before interest and taxes (EBIT) at €5.3 billion, displaying gradual recovery from setbacks experienced during the COVID-19 pandemic.
The A350 is particularly pivotal for Airbus, representing the company’s foray back to full production capacity after pandemic-induced reductions. Following its increase from five aircraft per month during the height of travel restrictions, Airbus had aimed to establish production stability. The shifting dynamics, as highlighted, have led to adjustments, confirming fears of overly ambitious projections.
Industry forecasts paint a mixed picture for the performance of Airbus' A350, with the latest predictions aligning with Airbus’ new production target of 73 A350s for 2025, down from the original estimate of 108 deliveries. Insight from Forecast International noted, “We maintained this cautious outlook, anticipating industry-wide supply chain constraints would persist, making Airbus’s short-term goals overly ambitious.”
Problems with Spirit AeroSystems are not merely production-related but extend to the development of new variants, such as the A350 freighter. This model's introduction has been pushed back to 2027, adding another layer of complexity to Airbus’ operational timeline. By focusing efforts on resolving these supply pressures, Airbus aims to mitigate delivery delays and restore confidence among stakeholders.
The demand for widebody aircraft remains strong, particularly as international air travel rebounds post-pandemic. Yet, as the market evolves, Airbus faces the dual challenge of overcoming technical barriers and maintaining competitive delivery timelines. Analysts expect long-term stability and growth potential for Airbus’ A350, driven by strong demand for intercontinental travel.
Looking to the future, Airbus maintains its decarbonization goals, promising reduced environmental impact and promoting newly renovated aircraft capabilities. Moving forward, the company's expected financial uplift hinges significantly on the successful navigation of current challenges.
Airbus has confidently committed to enhanced shareholder returns, proposing dividends of €2.00 per share for 2024, alongside additional special dividends, signifying its confidence post-financial complications.
Despite these hurdles and reduced production rates, discussions among aviation experts hint at potential positive outcomes, expressing optimism about Airbus' ability to hit production goals by the end of this decade. The aircraft manufacturer continues to adapt its plans and proactively responds to changing market dynamics, illustrating a seasoned commitment to progress.