Airbus Cuts A220 Production Target Due to Supply-Chain Woes — Update
By Mauro Orru
Airbus said it was lowering its production target for A220 narrow-body aircraft as persistent supply-chain snarls continue to weigh on its manufacturing operations.
The European plane maker said Wednesday that it now expected to churn out 12 A220 aircraft a month next year compared with a previous target of 14 planes a month, citing the current balance between supply and demand.
The company said it still expected to produce 75 A320 narrow-body planes a month in 2027 and five A330 aircraft a month in 2029. For its bigger A350 model, the company continues to target 12 planes a month in 2028.
Airbus has been in a tough spot for years due to challenges in procuring engines and cabin equipment from suppliers that the company needs to assemble its planes and deliver them to customers on schedule.
Earlier this year, Airbus agreed to acquire some Spirit AeroSystems Holdings facilities that make parts for its jets in the U.S., Europe and Africa, in a move to stabilize supply. Airbus executives had previously said that challenges, especially with Spirit, were pressuring plans to increase production of A220s and A350 wide-body aircraft.
Airbus's decision to lower its A220 production target comes hours after its American rival Boeing said it booked a $4.9 billion noncash charge in the third quarter to account for a pushback in the first delivery of its new 777X model to 2027 after falling behind schedule on some certification milestones.
"Deliveries remain backloaded amid a complex and dynamic operating environment," Chief Executive Guillaume Faury said.
The group had dispatched 507 commercial aircraft to customers by the end of September and is targeting roughly 820 deliveries for the whole year. Airbus tends to deliver more aircraft toward the final months of the year.
Airbus confirmed its aircraft-delivery target and financial guidance for the year that now include the impact of currently applicable tariffs and the integration of certain Spirit AeroSystems operations.
The company said adjusted earnings before interest and taxes--its preferred measure of profitability--should come in at roughly 7 billion euros ($8.16 billion) this year. Free cash flow before customer financing--a metric closely watched by analysts and investors--is still projected at roughly 4.5 billion euros.
Airbus posted revenue of 17.83 billion euros for the third quarter, up 14% on year. Adjusted EBIT climbed 38% from a year earlier to 1.94 billion euros. Net profit increased 14% to 1.12 billion euros.
Analysts had forecast revenue of 17.37 billion euros, adjusted EBIT of 1.76 billion euros and a net profit of 1.25 billion euros for the quarter, according to a market consensus provided by the company based on estimates from 18 analysts.
Write to Mauro Orru at mauro.orru@wsj.com