Airbus Q1 Miss Masks Strong 2026 Outlook

Airbus reported first-quarter results that, at first glance, look disappointing and even concerning. But that’s not the full picture. The European airframer is confident that it will meet the previously shared guidance of around 870 commercial aircraft deliveries and ramp up production according to plan. As reported on AirInsight previously, Q1 saw just 114 deliveries, compared with 136 last year. They include 19 A220s, 81 A320neo family, three A330neos, and 11 A350s. At the 2025 results presentation in February, CEO Guillaume Faury and CFO Thomas Töpfer identified three issues that will impact deliveries this year. The first is the number of Geared Turbofans that Pratt & Whitney is delivering. The second is the panel issue on the A320neo family that requires rework. And the third is the integration of Spirit AeroSystems' work packages, notably those for the A220 and A350. GTF The GTF delivery issue is still unresolved, said Faury. But his tone was different from February, when he showed frustration and said that Airbus would enforce its legal right to keep Pratt & Whitney to its contractual obligations. On today’s media call, Faury said: “We are still in the same situation as in February, with an important disagreement on the number of engines that they should deliver to us. We are negotiating with Pratt & Whitney, negotiating in a way to enforce our right and demonstrating to them why we have expectations.” “It is progressing; we are working with them. We are trying to resolve the situation and come to an agreement. So we work both ways: the dispute on the one hand and the negotiations on the other hand to constructively resolve the disagreement we have.” That sounds like there might be an amicable solution in the end, but we don’t know yet if that will fully meet the number of engines that Airbus is expecting. Faury added that Airbus is not producing any "gliders" right now. [caption id="attachment_191495" align="aligncenter" width="534"] Airbus CEO Guillaume Faury and CFO Thomas Töpfer[/caption] Panel issue The second problem is the panel issue on the forward section of some A320neo family aircraft. It showed up last Autumn on parts that were produced by a Spanish supplier and has been pacing deliveries since then. “The issue will be completely behind us by the end of HY1. We are reworking quite a significant number of planes that have been identified with faulty panels to be replaced. This is significant work on an aircraft or section that has already been produced.” China Faury mentioned a new problem that impacted Q1 deliveries by some 20 aircraft, which hadn't been identified before: a certification issue with A320neo aircraft in China. AirInsight noticed that the number of aircraft coming out of the Tianjin assembly has been very low this past quarter. “I don’t want to go into the details, as it is now behind us. We have resumed deliveries to our Chinese customers. What has not been delivered in Q1 will be delivered in Q2”, Faury said. He was unwilling to go deeper into the issue, but referred to it as an “administrative topic” with delivering aircraft from the European type certificate to those approved by the Chinese CAAC, which come with certain characteristics of the plane.” This indicates that something on the aircraft might have received an update that needed CAAC approval first, but we don’t know the details. Backloaded While 114 deliveries in the first quarter represent just 13 percent of the full-year guidance of around 870 aircraft, Airbus is confident it can be met. Thomas Töpfer: “As we said in February, the Pratt & Whitney issue is the limiting factor for our 2026 deliveries. But it also makes it a back-end-loaded year, as Pratt will deliver more engines in the second half than in the first. The panel issue is not a limiting factor, but it makes it more of a backloaded year, as we have to deal with it in the first half. Both together make 2026 even more backloaded than 2025.” Faury hopes that production and deliveries will be more synchronized again by the end of HY1. The airframer reiterates the production rates of its product line. The A220 continues to ramp up to 13 a month in 2028, as mentioned in February in the FY25 presentation. While P&W issues will impact rates this year and in 2027, the A320neo family should reach a rate of 70 to 75 a month by the end of 2027 and stabilize. The A330neo will go to five per month in 2029, the A350 to 12 in 2028. The main cargo door has recently been installed on the first A350F, which will make its maiden flight this summer. [caption id="attachment_191496" align="aligncenter" width="665"] Airbus A350F main cargo door[/caption] Disruptions Airbus’s 2026 guidance assumes no additional disruptions. The Middle East crisis remains excluded, and Faury said there has been little impact on aircraft demand so far. “We remain confident in the fundamentals of the industry. We are not at a point where we suggest something will be different from what we have today.” Boeing Group CEO Kelly Ortberg said last week in his earnings call that he has not received any request for order deferrals or cancellations, with two-thirds of deliveries scheduled beyond 2030. The situation is no different at Airbus: “We don’t see any cancellations nor postponements at this stage. We see airlines reducing or cancelling flights or reducing the intensity of their network. But we see as well that airlines absolutely need the most efficient aircraft right now, because that reduces the impact of higher fuel costs.” Financial results Lower commercial deliveries and lower US dollar depreciation are reflected in the Q1 financial results. Consolidated revenues were down by 7 percent year-over-year to €12.7 billion. Commercial Aircraft revenues dropped 11 percent to €8.4 billion, partially offset by 7 percent higher revenues from the Defence & Space business unit to €2.8 billion. Helicopters were flat at €1.6 billion. Consolidated EBIT Adjusted was slashed by 52 percent to €300 million, reflecting lower commercial sales, a €42 million working capital mismatch and balance sheet revaluation, plus €32 million related to the integration of the work packages of Spirit AeroSystems since the acquisition late 2025. Töpfer said that there were no surprises during the quarter, but that we sites in Belfast and Kinston require additional investments. EBIT Adjusted of Commercial was down 84 percent to €81 million. Airbus reported a consolidated net profit of €586 million, down 26 percent year-over-year. Free cash flow before customer financing was negative €2.5 billion, compared with €-310 million last year. This reflects the growing inventory of aircraft produced but not yet delivered. EPS was down 27 percent to €0.74. Net cash was 19 percent down to €9.8 billion. The only positive parameter is net order intake, which at Commercial Aircraft was up to 298 aircraft from 204 last year. This grew the order book by 4 percent to 9.037. R&D for the business unit was €566 million, up from €545 million a year ago. As mentioned, the full-year delivery guidance remains unchanged at around 870 aircraft. EBIT Adjusted is guided at around €7.5 billion, free cash flow before customer financing at around €4.5 billion.

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