Production issues not expected to delay Airbus earnings growth

The company says it expects to deliver 860 commercial aircraft this year, down from a previous forecast of 880-890, because of production issues with the A320neo.

"Ramping up production and transforming the production system is a difficult thing to do," Airbus CEO Guillaume Faury said. He said recent changes would ensure the company gets on top of production issues.

A new highly-automated fuselage structure assembly line for the A320 Family was recently inaugurated in Hamburg, showcasing an evolution in Airbus’ industrial production system.

The plane maker is on track to deliver more planes this year than Boeing – Airbus delivered 571 commercial aircraft in the first nine months of the year, compared to Boeing’s 301.

The success of the A320neo family could help Airbus maintain its advantage of its rival. Airbus has received more than 6,650 orders for planes in the A320neo family from nearly 110 customers globally.

Airbus says the success of its commercial aircraft unit was behind a 51% surge in earnings this quarter. However the company has maintained its guidance of a 15% growth in full-year earnings

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

He added: “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. The full-year free cash flow guidance has been adjusted to reflect the revised delivery outlook while the EBIT Adjusted target is maintained. We are focused on meeting our customer commitments and preparing the production system for the future.”