Airbus struggles to capitalise on rival Boeing’s difficulties

Workers at Airbus are well-used to the annual end-of-year push as the aircraft manufacturer rushes to speed up deliveries of its jets to customers.

But this time the rush has turned into a sprint as the European company looks to hit its promised delivery target in the face of persistent production delays and supply chain issues that have held back output — just as rival Boeing is mired in difficulties.

The annual delivery targets of Airbus and Boeing are closely watched as a metric of the health of the duo that dominate the airliner industry. Deliveries are also an important source of cash for manufacturers, as airlines typically pay the biggest chunk of the purchase price when the aircraft arrives.

With Boeing still reeling from the mid-air blowout of a section of one of its jets in January that badly knocked faith in the company — at a time when airlines have been clamouring for more jets to take advantage of the post-pandemic travel boom — Airbus, the world’s biggest aeroplane maker, has been able to cement its lead over its US rival.

But any hopes Airbus had of capitalising on the demand surge during a period when its competitor was weak have been hamstrung by engine delivery delays and shortages of labour and components.

Sash Tusa, analyst at the research group Agency Partners, said Airbus had been “unable fully to capitalise on Boeing’s weakness because of the supply chain issues”, adding that this was “clearly a big lost opportunity”.

“That’s the rub,” he continued, noting the effect in particular on Airbus’s top-selling A321neo. “Airbus can’t manufacture them fast enough,” he said of the narrow-body jet. “Airbus has come out of Covid with more problems than they probably acknowledge and the operational task of turning it around is very significant.”

The aerospace and defence group will have to deliver about 200 jets in the final two months of 2024 to meet its target for the year. Airbus deliveries typically ramp up towards the end of the year but it is an ambition that many analysts think is over-optimistic, even though the number has already been cut once this year.

Airbus will have to “match or exceed record delivery volumes” over those two months “to get to the higher target that they’ve set themselves compared with 2023”, said Max Kingsley-Jones, head of Advisory at Cirium Ascend Consultancy, an aviation specialist. 

Airbus started the year on a high, having ended 2023 with a record 2,094 orders for new aircraft and a total order backlog of 8,598. But in June, it cut its end-of-year target from 800 to about 770 and pushed back its target of producing 75 a month of its A320 family of jets from 2026 to 2027. It also cut its annual profit forecast.

The revisions sent Airbus shares tumbling more than 10 per cent at the time. They are currently down 1.3 per cent since the start of the year.

Guillaume Faury, Airbus chief executive, last week acknowledged the pressures, telling a conference in Brussels that “we have more demand for our products than we can deliver”.

Airbus said it had always made clear that the delivery target would be “backloaded and challenging”. It was “focused on that target” and taking “necessary actions with suppliers to achieve it”, the group told the Financial Times.

One bright spot has been the entry into service this month of a new extra-long-range member of the single-aisle A320 family, the A321XLR. The aircraft threatens to shake up the long-haul market, opening up new routes for airlines that would typically have to rely on larger models.

Delivery delays, however, continue to affect customers. AerCap, the world’s largest aircraft lessor, said last month it had pushed the delivery of 15 Airbus A320neo jets out of 2025 and into 2026. 

Airbus had “promised a lot”, said one industry executive. “That’s putting a lot of strain on the system.”

Ed Bastian, chief executive of Delta Air Lines, struck a more optimistic tone about Airbus’s performance. 

“The only thing I can look at is what the history has been, and Airbus has been meeting their commitments to Delta on a fairly regular pattern. Not perfect but largely in line with our expectations,” he told reporters last week. 

Airbus’s ambitious targets are straining a supply chain that has yet to regain the levels of productivity it had before the pandemic. The company in the summer launched an internal programme called Project Lead to tackle costs and cut out smaller initiatives, ensuring workers were focused on the main goal of boosting production.

“It’s difficult for some subcontractors to follow the ramp-up,” said one person familiar with the situation at Airbus, citing difficulties concerning recruitment, cash flow and the need for investment. 

Supplies of engines have been one of the biggest issues, with CFM International, a joint venture between France’s Safran and GE of the US, and Pratt & Whitney struggling to meet demand. Engine makers have to meet demand for new engines from planemakers while at the same time servicing the after-market for spare engines or parts to keep existing planes flying.

CFM and P&W supply engines for the A320neo family and both have also had to deal with durability issues. P&W has had the added disruption over the recall of its PW1000G geared turbofan units due to contaminated powdered metal.

The issues for us, said Delta’s Bastian, were “less about Airbus and more about the geared turbofan and the engine, which is a whole other set that our technicians are working hard on”. 

For Airbus, further challenges lie ahead. It will need to bed in a new head of its core planemaking business in the coming months, and also navigate potential US import tariffs in the wake of the election of Donald Trump.

Christian Scherer, head of Airbus’s commercial aircraft division, is to be replaced at the start of 2026 by Lars Wagner, chief executive of German engine maker MTU Aero Engines.

Faury at the time played down suggestions the move was a reflection on the performance of the 62-year-old Scherer, insisting it was part of a well-planned succession. Nevertheless, the changing of the guard will take place at a time Airbus can ill-afford any hiccups in its factories. Wagner is regarded in the industry as someone with a strong operational focus.

But with the industry’s supply chain issues expected to persist for the next one to two years, airline executives will continue to have to wait for new planes.

Carsten Spohr, chief executive of German carrier Lufthansa, recently told employees that both Airbus and Boeing were letting down their customers.

“Nothing comes as promised,” he recently told employees on an internal webcast, noting how the company could not rely on deliveries from Airbus or Boeing factories. Lufthansa declined to comment on his remarks.

“We live in a [capacity] shortage that I’ve never seen before,” said Spohr. “It’s very frustrating.”

Additional reporting by Philip Georgiadis in London