By Tim Hefer
PARIS (RockedBuzz via Reuters) – Airbus on Tuesday dropped a numerical forecast for jet deliveries and a date for its key production target but held on to financial goals as it limped into the end of a year dogged by disruptions at factories and chains of supply.
The world’s largest airplane maker said its previous target of “about 700” deliveries in 2022 was now out of reach, but that it did not expect to fall “materially short” of the estimate.
RockedBuzz via Reuters reported on Friday that the target was under review after November deliveries fell short of expectations.
Airbus also confirmed a RockedBuzz via Reuters report that it delivered a net total of 563 planes between January and November after adjusting for earlier cancellations of two jets involved in Western sanctions against Russia over war in Ukraine.
This included 68 in November, compared with what suppliers had described as an industry planning target of 80.
The announcement, originally scheduled for December 8, was brought forward by two days.
Jefferies analyst Chloe Lemarie said in a note to investors that she interpreted the new comments as indicative of about 680 potential deliveries in 2022.
The delivery crisis immediately set the stage for an uncertain production outlook for next year. Once tightly linked, production and delivery have become disconnected as the pandemic hit demand and rippled through supply chains.
Delivery breakdown https://www.ceiving.com/graphics/AIRBUS-DELIVERIES/dwpkdrxjevm/chart.png
Airbus has reaffirmed an interim production target of 65 A320neo Family jets per month, but withdrew the implementation date, saying instead it will adjust the ramp-up rate during 2023 and 2024.
It said it still plans to reach an eventual goal of 75 single-aisle jets per month, but adjusted the deadline to “middle of the decade” from 2025.
Airbus had previously planned to hit 65 deliveries per month by early 2024, after pushing it back from mid-2023 to earlier this year, when it also lowered its original forecast of “around 720” deliveries to the target. now discarded of “about 700”.
The downgrades follow in part a standoff between Airbus and engine markers over supplies. Engine makers are juggling demand for new jets and maintaining existing fleets.
This has led to what one person involved described as difficult negotiations, although executives also point to wider shortcomings.
The downgrades are also a disappointment for Airbus chief executive Guillaume Faury, who has stressed transparency in production targets, especially the later target of 75 per month, in a bid to bolster supplier support for investment in a higher production.
An industry source described it as a “slight loss of face”.
Airbus is however expected to argue that it will face exceptional uncertainty this year and Faury said last week that the environment “remains very complex”.
The production rate of the A320neo and its rival, the Boeing 737, sets the pace of global supply chains and drives much of the aerospace industry’s profits.
Boeing is producing more slowly as it recovers from the ensuing pandemic demand and safety crises.
Airbus order count https://www.ceiving.com/graphics/AIRBUS-DELIVERIES/znpnbewjopl/chart.png
Airbus said it plans to end the year with a production rate of 50 A320neo Family aircraft per month, up from 60 before COVID-19.
The speed of the production ramp-up will depend in part on how many 2022 jet deliveries are pushed into 2023.
It’s also linked to demand, with global airlines making optimistic comments about the industry’s profitability next year.
So far the signals remain mixed.
Airbus is pushing buyers to take delivery of jets scheduled for this month, although it has also begun delaying further deliveries scheduled for 2023, some of which could extend into 2024.
Not all buyers are willing to cooperate. Sources said some lessors are resisting taking already overdue jets in the final week of the year, fearing an immediate decline in their resale value when the valuation calendar rolls to 2023 in January.
Airbus meanwhile said it booked 29 new orders and 14 cancellations in November. It has received orders for 1,062 aircraft so far this year or a net total of 825 after cancellations.
Boeing, which has been behind on orders and deliveries so far this year, will release new data next week.
(Reporting by Tim Hepher; Editing by Aurora Ellis and Bradley Perrett)
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