Airbus has slowed the increase in production of its best-selling jets because of persistent supply chain disruption as the aerospace industry struggles to recover to pre-pandemic levels of productivity.
Guillaume Faury, chief executive, said the world’s biggest jet manufacturer had failed to hit delivery targets as supply chain bottlenecks held back the aviation market’s revival.
“The situation has been quite frustrating last year. We were not satisfied with the number of aircraft we delivered last year. It will take us two years to achieve what we had planned to do in one,” he told analysts on a call to discuss full-year results.
The passenger jet maker said it would adjust the monthly production rate target of its A320 family of single-aisle jets to 65 by the end of 2024. The goal of 75 a month will slip to the end of 2026. Both targets are about a year later than originally forecast.
Airbus boosted its delivery target to 720 aircraft for this year — up from the 661 it delivered at the end of 2022 — but in line with its original estimate for last year that it had to adjust twice because of pandemic raw material and labour shortages, as well as supply issues arising from the Ukraine war.
At the same time, the company will increase its output of bigger widebody aircraft as international travel returns. Airbus will lift monthly production rates of its A350 from six a month to nine by the end of 2025.
Production of its A330neo jet will increase from a rate of three a month to four next year.
Although the supply-chain situation had “stopped degrading”, Faury said he was unsure when the industry would be back to pre-Covid-19 levels of productivity.
“Our productivity today is much lower than it was before Covid. It is coming from many different sources. This is a very disrupted environment, that’s making us very inefficient . . . When will we be back to 2018 levels of productivity? I don’t know,” he said.
Faury said the company had been producing about 45 A320 jets a month at the end of last year. Airbus will be at about 50 on average this year, he added, while stressing that the company believed in the revised targets given its much better understanding of the environment.
Demand for air travel has soared as countries have lifted pandemic-era restrictions, prompting airlines to order new aircraft. Tougher emission reduction targets are also forcing carriers to clamour for more fuel-efficient planes.
Airbus this week secured a 250-plane order from Air India that included 40 of its A350 wide-body jets.
The Toulouse-based aerospace and defence group is targeting an adjusted operating profit of €6bn for 2023 after posting a stronger than expected €5.627bn last year, an increase of 16 per cent from 2021.
The result was driven by higher commercial aircraft deliveries as well as positive retirement obligations, sending shares in the group up 4 per cent to €123.46 in Paris by early afternoon on Thursday.
Free cash flow before mergers and acquisitions is expected to drop to €3bn from €4.7bn in 2022, which had been helped in part by favourable exchange rates.
Group revenues for the period rose 13 per cent to €58.7bn, of which its defence activities contributed €11.5bn. Airbus also booked a €477mn charge on the ailing A400M military transport programme.
The company is proposing a dividend of €1.80 a share, an increase of 20 per cent.
Airbus on Wednesday announced that it had appointed German executive Thomas Toepfer as its next chief financial officer from September 1. Toepfer, who is chief financial officer at German polymer manufacturer Covestro, will succeed Dominik Asam who steps down next month.