Airbus has warned that the supply chain crisis gripping the global aerospace industry could last until next year as deliveries of new aircraft slowed in the first quarter.
The world’s largest aircraft maker said there were still shortages in the delivery of components, equipment, semiconductors, labour and even seats but stuck to its guidance to deliver about 720 aircraft by the end of the year.
It is an “overall challenging situation”, chief executive Guillaume Faury said on Wednesday. The supply chain delays, he predicted, would “last all along 2023 and potentially till the beginning of next year”.
Airbus, along with US rival Boeing and other aerospace manufacturers, has been struggling to increase production to meet resurgent demand from airlines after the height of the Covid pandemic. Global air passenger traffic rose close to 70 per cent last year as countries lifted restrictions, underlining the rebound in people’s appetite to travel.
At the same time, sanctions tied to the war in Ukraine have also made it harder for Airbus and others to secure important raw materials such as titanium and aluminium.
Executives from aircraft leasing companies have in recent days warned that they expect disruption to deliveries to persist, although the delays are pushing up lease rates.
“Production issues, supply chain issues are likely to be a reality that we will be living with through 2023, 2024,” Andy Cronin, chief executive of Dublin-based lessor Avolon, told the Financial Times last week.
Airbus on Wednesday said the ongoing supply chain delays had held back jet deliveries in the first quarter. The company said it had delivered 127 aircraft in the first three months, including 106 of its best-selling A320 family of single-aisle jets, a drop of 9 per cent from the same period last year.
The manufacturer also reaffirmed plans to increase its A320 output towards a monthly rate of 65 by the end of 2024. Airbus last month announced plans to open a new assembly line in Tianjin in China, to help it meet plans to produce 75 of the jets in 2026.
Adjusted earnings before interest and taxes fell to €773mn, from €1.26bn in the first three months of 2022. Revenues were €11.8bn compared with €12bn.
Underlying free cash flow slid to a negative €889mn in the first quarter from a positive inflow of €213mn a year earlier, which Airbus attributed to inventory build-up as it ramps up production of aircraft. But it stuck to its full-year cash flow target before mergers and acquisitions of €3bn.
Source: Economy - ft.com
