Airbus Reports Sky-High Profits But It’s Having Major Supplier Problems
Airbus is having major supplier problems and is having to include sales of a bought-in plane to meet its production targets for the year.
The European plane manufacturer announced its third-quarter results Wednesday, touting a 212% year-on-year rise in quarterly profits—to €957 million ($ 1.09 billion)—that largely reflects strong demand from carriers. However, meeting that demand is proving to be an issue.
In its results statement, Airbus noted that its 2018 target of delivering 800 planes was a “greater stretch” thanks to problems securing engines for its A320neo narrow-body planes, “as well as some internal industrial challenges”—a likely reference to troubles automating its factories.
Airbus (eadsy) will also deliver fewer of its A330neo wide-body planes this year than planned, because of production problems at engine supplier Rolls-Royce, Bloomberg reported.
When it went bust a month ago, the charter airline Primera Air cited late deliveries of the Airbus A321 as a key reason.
In order to meet its 800-planes target for the year, Airbus is including in the tally 18 of the A220 planes it bought in from Canada’s Bombardier (the aircraft was previously known as the CSeries). Airbus had previously excluded the A220 from its forecasts.
Boeing (ba) has had similar supplier issues, but said last week that they had been resolved.
Investors didn’t seem too worried about Airbus’s engine supply issues, sending the company’s shares up by 3.6% at the time of writing on Wednesday morning.
