BREAKING: Airbus has confirmed a critical industrial quality issue impacting metal panels on a “limited” number of its A320-family aircraft. This urgent development, announced on November 27, 2023, has sent the company’s shares tumbling by as much as 10%, compounding the challenges faced after a recent software recall that disrupted operations worldwide.
The news comes as Airbus grapples with multiple challenges, including a significant recall of A320 jets for a software bug. Following the announcement, shares closed down 5.8%, overshadowing the company’s efforts to meet ambitious delivery targets. The latest reports indicate that the suspected production flaw may delay some deliveries, although industry sources suggest that it has not yet affected in-service aircraft.
In a statement to the media, an Airbus spokesperson confirmed that inspections are underway for all potentially affected aircraft. They noted, “The source of the issue has been identified, contained, and all newly produced panels conform to all requirements.” While the spokesperson acknowledged the issue stems from a supplier, they refused to disclose the supplier’s name.
As Airbus races to meet its target of around 820 deliveries for the year, the stakes are high. The company managed to deliver 72 aircraft in November, a number that fell short of analysts’ expectations. With just one month left in the year, Airbus is under pressure to achieve a record output of more than 160 jets in December, surpassing the previous high of 138 jets set in 2019.
The implications of this quality issue extend beyond Airbus, affecting airline customers like Lufthansa and easyJet, which saw their shares decline following the announcement. Analysts remain divided on whether Airbus can still achieve its delivery goals, which are crucial for revenue and cash flow as airlines typically pay a substantial portion of an aircraft’s value upon delivery.
Jefferies analyst Chloe Lemarie, who monitors aircraft handovers, described the November performance as weaker than expected but noted that the target remains within reach due to rising underlying production rates. Independent aviation analyst Rob Morris expressed cautious optimism, suggesting that Airbus could reach approximately 800 deliveries for the year, which may be seen as satisfactory based on their forecast language.
With the clock ticking on delivery targets and mounting operational hurdles, Airbus faces a pivotal moment that could define its year-end performance. The aviation industry and investors alike will be watching closely as the situation develops.
Stay tuned for further updates as Airbus navigates these challenges.
