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Airbus slashes production targets despite rival Boeing's troubles

Tom Belger
·Finance and policy reporter
Updated
An Airbus A321LR arrives after its maiden flight during a presentation of the company's new long range aircraft in Hamburg-Finkenwerder, Germany, January 31, 2018. REUTERS/Fabian Bimmer
Airbus has slashed its delivery targets. Photo: Fabian Bimmer/Reuters

Airbus (AIR.PA) has slashed its production targets for commercial aircraft this year, despite hopes of capitalising on the troubles of its US rival Boeing (BA).

Europe’s largest plane maker said in its latest results it is now planning to only build around 860 jets in 2019, when it was reported to have previously been targeting up to 890.

The company’s chief executive Guillaume Faury said the figures reflect “underlying actions to secure a more efficient delivery flow.”

Airbus is said to have been struggling with problems at its newly expanded plant in Hamburg, Germany, including supplier delays, staffing issues and production snags, according to Reuters.

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It posted pre-tax earnings of €1.6bn (£1.38bn, $1.78bn) in the third quarter, up 2% on a year earlier, and retained its full-year targets.

Revenues slid by 1% to €15.3bn, but the company said revenues were “stable” because favourable foreign exchange rates and higher defence and space programme revenues compensated for lower commercial aircraft production.

The company also revealed it had taken a €221m hit by the German government’s suspension of defence export licences to Saudi Arabia, which it said had been extended until March 2020. It booked €13m in the third quarter.

Faury said in a statement: “Our nine-month results are mainly driven by the performance in commercial aircraft, reflecting both the A320neo ramp-up and progress on the A350.

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“We are focused on the A320neo ramp-up and improving the industrial flow while managing the higher level of complexity on the A321 ACF in particular.

“Our nine-month delivery numbers and the updated delivery outlook for the year reflect the underlying actions to secure a more efficient delivery flow in the next years as we progress to rate 63 per month for the A320 Family in 2021.”

It comes a day after Indian budget airline Indigo ordered 300 A320neo jets worth a reported £26bn ($33bn), in one of Airbus’ biggest ever orders.