As Europe’s largest aerospace business sought a clean slate approach to supply disruptions and commercial risks, Airbus lowered key industrial and financial targets and incurred a hefty €900-million ($965 million) charge for its struggling space programs, according to Reuters.
Due to increasing doubts from suppliers on its intentions to produce jets, Airbus reduced its highly anticipated prediction for deliveries this year from approximately 800 to about 770 aircraft.
It also softened plans to increase manufacturing of its best-selling A320neo family by pushing back its target date of 2026 to 2027, when it was originally expected to reach a record-breaking speed of 75 planes per month. This contrasts with the current expectation of 50 jets every month.
Due to the revised delivery estimates, which indicate 5% annual growth rather than 9%, Airbus has decreased its primary financial goals for 2024.
Instead of 6.5 billion to 7 billion euros, it now projects underlying operating income of about 5.5 billion euros, and free cash flow of 3.5 billion euros as opposed to 4 billion euros.
Guillaume Faury, the CEO of Airbus, told analysts, “We have to bite the bullet; we are facing headwinds right now.”
The industry estimates were revised downward a few weeks after Reuters initially revealed that Airbus was experiencing fresh manufacturing delays due to heightened parts shortages.
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