Airbus Q1 deliveries drop as supply woes extend into 2023

BLOOMBERG

Airbus SE delivered 127 jetliners in the first quarter, a 9% drop from a year earlier, as parts shortages spilled into 2023.
Deliveries totalled 61 aircraft in March, the world’s biggest planemaker said. The first-quarter drop will make it harder for Airbus to reach its goal of increasing shipments to 720 this year. Meeting output targets is crucial for cash flow at Airbus and Boeing Co because the bulk of payments are due upon delivery.
Airbus got off to a slow start in January, delivering just 20 aircraft after supply chain constraints held up production. The company will need to make up the shortfall with higher output over the rest of the year, Jefferies analyst Chloe Lemarie said in a research note.

Boeing Parity
The March figures mean Airbus likely lagged behind Boeing in first-quarter deliveries. Jefferies analyst Sheila Kahyaoglu estimates the US manufacturer handed over 130 planes in the period, including 64 for March, as it ramps up production of its top-selling jet, the 737 Max, and works down inventories of the 787 Dreamliner.
Bloomberg reported that Boeing plans to produce 38 Max units a month by mid-year, a 23% increase from the current pace. The company, which is scheduled to report first-quarter figures later on Tuesday, last eclipsed Airbus on an annual basis in 2018.
Production trends at Airbus are encouraging, Lemarie said. While engine shortages, a major factor in last year’s bottlenecks, have eased, Chief Executive Officer Guillaume Faury has warned supply issues will stalk the planemaker at least through year-end.
“We expect our commercial aircraft delivery profile to be back-loaded again,” the CEO said on a February conference call. “In light of ongoing geopolitical and macroeconomic turbulences, risks of further disruptions remain.” Airbus delivered 661 aircraft in 2022, after lowering its initial target from 720. It handed over 140 jetliners in the first quarter of last year.

Parts, Labour
The parts shortages have forced Airbus, based in Toulouse, France, to slow an ambitous output ramp-up for its A320 family of single-aisle jets. Sanctions tied to Russia’s invasion of Ukraine have made it harder for Airbus, Boeing and their suppliers to secure raw materials like titanium, and have driven up prices. China’s Covid Zero policies also disrupted parts flows, and post-pandemic labor shortages have hit subcontractors, Faury said in November. The European planemaker is targeting 65 A320 family units per month by the end of 2024, with a further rise to 75 in 2026.
Both goals are about a year later than Airbus’s previous projections. As part of the goal, Airbus last week announced that it would double its production capacity in China with a second A320 final-assembly line.
First-quarter sales totalsed 142 after cancellations, Airbus said. March orders totalled 18 units by the same measure.
The planemaker also won an order for four A350 freighters from an undisclosed customer, according to data released by Airbus.