Airbus Says It Has "Everything In Hand"

Airbus says it will deliver around 870 aircraft this year, and its commercial chief insists the supply chain troubles of the past two years are being brought under control. The sums are demanding, though. Reaching the target means handing over a very large number of jets in the last three months of the year.

Confidence on the Record

Lars Wagner, chief executive of Airbus's commercial aircraft division, told reporters in Toulouse that he was "confident" of hitting the target. He added that Airbus had "everything in hand to make the figure a reality". Two weeks earlier he had gone further, telling reporters he was "very confident" after an industrial quality issue hit some A321neo jets.

That is a strong statement from the head of the world's largest planemaker. Having spent many years watching corporate guidance rise and fall, I know that executives rarely repeat a number this publicly unless they believe the pipeline supports it.

The Arithmetic

Airbus delivered 547 commercial aircraft in the year to the end of September. That leaves more than 320 jets to hand over to airlines by the end of December, so the calendar is congested.

Investors watch this closely because planemakers typically receive the bulk of their payment from airlines on delivery. A late run of handovers is a healthy sign for cash flow. A missed target is a very public disappointment.

A Troubled Two Years

Demand is not the problem. Airbus's A320 family is sold out for the next eight years, yet production defects and supply bottlenecks have dogged output. Wide-body A330 deliveries slowed over the summer after a quality lapse was found in June in some aircraft still being built.

Airbus named two remaining challenges. One is delays from US engine maker Pratt & Whitney on the A320 jets. The other is quality problems with cabin seats. Pratt & Whitney responded that it has increased annual deliveries of new engines since 2019 and is expanding its maintenance and repair capacity.

The Engine Question

The engine issue deserves a closer look. Reports in recent days describe more than two dozen A320neo jets parked without engines and waiting for delivery. That gives one American supplier a remarkable influence over a European delivery calendar.

Looking Ahead

Despite the constraints, Wagner backed the planned production increases. Airbus is on track to build 70 to 75 A320s a month by the end of 2027. It also wants to push long-haul output, particularly the A350, beyond the 12 a month it has targeted for 2028.

He said Airbus is studying a larger A350-2000, which would compete directly with Boeing's long-delayed 777X. That aircraft was due to enter service in 2020 and is now set to complete certification with the US regulator next year. A stretched version of the smallest model, the A220, is also under study. There is "clearly demand", Wagner said, for both. Any decision on raising A350 output, which would need a new final assembly line, would come "sooner rather than later" and well before 2030.

The Next Big Bet

Airbus is also pressing on with a successor to the A320, which Wagner called a "game changer". The industry needs aircraft that burn significantly less fuel if it is to meet net zero targets while continuing to grow. A decision on whether to launch the programme will come by the end of the decade.

The company also forecasts that aviation will need 2.44mn extra workers over the next two decades, including more than 1mn cabin crew. It is keen to win a bigger share of the increasingly lucrative services market.

Why It Matters

Confidence is cheap in October and expensive in January. Airbus has a full order book, a strong pipeline of new products and a CEO prepared to put his name to the number. It also has a calendar with no room for error and a key supplier it does not fully control.

If it delivers, it will show the worst of the supply chain crisis is behind it. If it falls short, the engines and the seats will take the blame, and the long-term plans will face tougher questions.