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Shares of Airbus tumbled on Tuesday after the world’s largest aircraft maker cut its annual profit forecast as supply chain disruptions worsened and a charge related to its aerospace business was imposed.
The company’s supply chain has been plagued by delays since the pandemic, but CEO Guillaume Faury sent investors into a frenzy after warning that engine shortages were once again becoming a “significant problem”.
The new rumors mean Airbus will deliver “approximately 770” commercial aircraft this year, up from a previous forecast of 800. The company has also pushed back its target of producing 75 units per month of its best-selling A320 aircraft family from 2026 to 2027.
Unlike 2022, when Airbus last had engine shortages, the group is now facing shortages at both Pratt & Whitney and CFM International, both suppliers of the A320.
“That is a new situation that we did not expect,” said Faury, who issued the warning on Monday after the closing of the French stock market. “Engines that were not a problem in 2023 and early 2024 will become a major problem again.”
Cabin parts were also in short supply, Faury added, as many airlines were refurbishing older planes due to the challenge of obtaining new ones.
Airbus shares fell 12 percent in afternoon trading. The warning hit the wider aerospace sector, with shares of engine maker Rolls-Royce falling 4 percent and shares of aerospace supplier Melrose Industries falling 3 percent.
Airbus has been hit by supply chain constraints over the past two years that have hampered its ambition to fully meet airlines’ resurgent demand for new aircraft after the pandemic.
“The continued supply chain issues in commercial aircraft run counter to the narrative of incremental improvement,” said Robert Stallard, an analyst at Vertical Research Partners.
“That even the super-conservative Airbus gets this view wrong is indicative of how challenging this supply chain situation is, and once again casts doubt on the [original equipment manufacturer] contingency plans,” he added.
It is the second time since 2022 that Airbus has postponed its annual delivery target. Faury had said at an aerospace summit in Berlin earlier this month that he expected restrictions on the industry’s supply chain to continue for another two to three years.
Airbus also said it would record a charge of around 900 million euros in the first half of the year related to its space activities, following a review of its long-term programs by new management.
It cited “complex and sophisticated products” that had created development risks. The company said it would “evaluate all strategic options, such as potential restructurings, partnership models, portfolio review and mergers and acquisitions”.
The aerospace and defense group now expects adjusted earnings before interest and taxes of €5.5 billion this year, down from a previous forecast of as much as €7 billion. Airbus reports its half-year results on July 30.
The warning came as Airbus nears an agreement with Spirit AeroSystems to take over the work the US-based supplier is doing on some of its programmes, particularly on the A220 and A350 aircraft. A deal will clear the way for Boeing to acquire most of Spirit, including its Kansas operations.
Boeing has been in talks with Spirit since March as the American aircraft manufacturer wants to improve the supplier’s production processes after part of the fuselage of one of its 737 Max planes exploded in mid-air in January. Spirit supplies Boeing with the fuselages and both companies are undergoing an audit by the US aviation safety regulator.
This article has been updated since publication to state that Airbus will deliver approximately 770 aircraft this year.