french airplane manufacturer airbus lowered its delivery outlook early Wednesday following a series of issues related to its A320 aircraft.
On Monday, reports of an alleged defect affecting dozens of A320 family aircraft came to light. Airbus later announced that it had identified a quality issue with a “limited number” of metal panels and that the cause of the problem had been “identified and contained.” This comes after the airline on Friday ordered an immediate software fix for about 6,000 A320 series aircraft, forcing the majority of its narrow-body planes to be grounded and leaving travelers around the world stranded.
Stocks traded on the Paris market fell on news of the panel issue. Shares fell nearly 7% on Monday and Tuesday as investors appeared to fear the possibility of more widespread quality problems like those involving rival Boeing Co.
The company said the revised delivery guidelines were due to “recent quality issues with fuselage panel suppliers impacting the A320 Family’s delivery flow.” The company is now targeting delivery of 790 commercial aircraft in 2025, 30 fewer than its previous forecast.
The company is maintaining its financial guidance given in late October, expecting adjusted earnings before interest and taxes of 7 billion euros and free cash flow before customer loans of around 4.5 billion euros.
The stock was up 4.3% as of 3:45 p.m. Paris time (9:45 a.m. ET) following the new guidance released early Wednesday morning.
Airbus stock price this year
Analysts at Jefferies noted that “not all 30 aircraft removed from the delivery guide this year will require part replacement, but at this time only non-destructive testing will need to be performed.”
“To be clear, this part is dual-sourced and only one of our suppliers is facing a quality issue, but this issue has already been resolved at production level.”
The problem with Airbus’ fuselage panels was related to parts supplied by Spanish company Sofitec Aero, a person familiar with the matter told CNBC on condition of anonymity.
CNBC has reached out to Sofitec Aero for comment.
Sector-wide issues
The software update issued by Airbus was implemented in response to the crash of an Airbus A320 on October 30th. jet blueThe plane suddenly lost altitude due to flight control problems, causing injuries.
The plane was headed from Cancun, Mexico, to New Jersey, but made an emergency landing in Tampa, Florida.
Airbus’s woes also affect its rivals boeing The company has been battling persistent quality issues and intense scrutiny after a door plug exploded during an Alaska Airlines 737 MAX flight last January. The company is seeing signs of recovery, Chief Financial Officer Jay Malabu said Tuesday that Boeing expects deliveries of both 737s and 787s to increase next year.
Chief Executive Officer Kelly Ortberg, who took over last year to turn the company around, said the company was starting to see improvements in its performance, including a reduction in quarterly losses.
— Laya Neelakandan contributed to this report
