Falling Short – Will Airbus Struggle to meet Guidance? |

Airbus is sticking to its annual guidance of 820 deliveries after another lackluster month of deliveries in July. Airbus delivered 67 aircraft in July, bringing its total for the year to 373 deliveries. With five months to go in the year, Airbus will need to average 89.4 aircraft per month to meet its guidance goal. A Difficult Challenge Airbus has historically demonstrated its ability to deliver over 100 aircraft per month, particularly in December, when year-end deliveries are pushed. However, without a sufficient build-up before year-end, Airbus may struggle to meet its delivery guidance. While it is challenging to produce more than 100 aircraft per month, it is tough to accomplish several months consecutively. As a result, August and September need to be higher than recent months. That won't be easy in August, the traditional holiday month in Europe. Airbus also has a significant number of “gliders” - basically aircraft that have been completed except for the engines. Finishing those aircraft while continuing to produce new aircraft could help close the gap with guidance. During the second quarter earnings call, CEO Guillaume Faury indicated that the company had 60 such aircraft in inventory that it hoped to deliver by year's end, subject to an increasing supply of engines from CFM and Pratt & Whitney. If those 60 aircraft were to become deliveries suddenly, and the factory continues to produce at standard rates, Airbus would only need to average 77.4 deliveries per month beyond delivering the 60 gliders for the remainder of the year. That prospect remains within reach, but it will need to rely on CFM and Pratt & Whitney delivering enough engines to keep the A320neo family assembly lines in Hamburg, Toulouse, Tianjin, and Mobile humming. A Model-by-Model Analysis Let’s look at what’s happening model by model, beginning with the A220, to see if Airbus can meet its guidance in 2025. Airbus has previously indicated a ramp-up for A220 with a goal of 14 per month in 2026. To date, the A220 hasn’t come close to that level. Only five were delivered last month, and we estimate 2025 will average about seven per month. Currently, the A220 order book isn’t large enough to support a rate of 14 per month. Moving to 14 per month in 2026 is both unrealistic and would significantly impact the backlog. We would expect 35 additional A220 deliveries in the final five months, joining the 46 delivered through July for a total of 81 for the year, an average of 6.75 per month if everything goes as planned in our optimistic scenario. Our more realistic scenario has Airbus averaging about 6.5 aircraft per month for the year, or 78 aircraft. The A320neo family is the critical one for Airbus, as narrow-body aircraft are the cash cow. Airbus had planned rates moving from 55 to 65 to 75 per month before the end of the decade, and is currently averaging about 50 in the first half of 2025. With supply chain constraints and gliders, it is doubtful that Airbus will reach the planned 660 by year's end, and will likely average nearly 52 for the year. Airbus delivered 286 in the first 7 months, and we estimate 275 in the final five months at a rate of 55, plus the 60 gliders, for a total of 621 deliveries for the A320neo family, an average of 51.75 per month. Our more realistic scenario has only 30 of the 60 gliders being delivered, reducing deliveries to 591 for the year. The A330 family delivered 14 aircraft through the first 7 months, a rate of 2 per month that we believe will hold for the year. We expect a total of 24 A330 family aircraft to be delivered during 2025, with production rising to 3 in 2026. This line is expected to remain slow and steady under both optimistic and more realistic 2025 scenarios, with 24 deliveries for the year. The A350 family is currently underperforming, having delivered 27 aircraft in 7 months, or just under four aircraft per month. Airbus had planned a rate of 6 per month, and needs to achieve that level before a scheduled increase to 10 per month in 2026. That 2026 rate appears optimistic given supply chain and production constraints impacting operations, including shortfalls in lavatories and seats, among other items. We believe that while Airbus could potentially reach a rate of six if supply chain issues are resolved, we think that five per month would be a more realistic number, or 25 more aircraft in the second half, bringing the total to 52 for the year in our optimistic scenario. Our more realistic scenario reduces our year-end estimate to 48, averaging 4 per month during the second half, as supply chain constraints with former Spirit AeroSystems facilities have not been resolved. The Boeing- Spirit Aero transaction has not yet closed, and the spin-off of units supplying Airbus to bring the supply chain under Airbus control can only close after the Boeing re-acquisition closes. That delay will likely impact production. The Bottom Line Putting together the estimates, we obtain the following results: The optimistic scenario yields 818 aircraft, just two short of the 820 target. However, this requires addressing supply chain issues with engines, seats, and lavatories, all of which are beyond Airbus' control, and solving them to enable full production by year-end. That is something we don’t feel is likely. Our more realistic scenario calls for 781 deliveries, with the A320neo program accounting for most of the delivery shortfall in 2025. We hope that Airbus will be able to solve its supply chain problems before year-end. Unfortunately, that appears today to be beyond Airbus' control.

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