Airbus collapses: it loses 11.3 billion euros on the stock market after cutting the number of planes it will manufacture in 2024

Airbus’ stock market plummeted on Tuesday, suffering its biggest drop in four years after the company publicly admitted that it was too optimistic in its forecasts for this year. Not only has it reduced its capacity to deliver new aircraft due to problems in the supply chain, but it is also recording accounting losses in its aerospace division, which has ultimately led it to cut the profit it expects to achieve in 2024. At the close of the session, its shares in the market moderated the decline until they lost 9.4%, which translates into losses close to 11.3 billion euros..

At the beginning of the year, the company announced that its goal was to reach 800 commercial aircraft deliveries throughout this year, a figure that has now been reduced to 770 due to these problems with the supply chain that mainly affect the engines, aerostructures and cabin equipment. In addition, it has postponed its goal of manufacturing 75 A320 family aircraft per month from 2026 to 2027. But it doesn’t stop there.

The French company has also acknowledged problems in its aerospace division, Space Systems. As the company itself explained last February during the presentation of its annual results, this line of business had had to face additional charges of around 600 million euros. Well, this figure now not only rises to 900 million euros, but the company has decided to fit this accounting hole into the accounts for the first half of the year.

For all this, The company expects operating profit for 2024 to be €5.5 billion, down 19% from the €6.5-7 billion range it announced in February. It also cuts scissors in its cash flow forecast, from the previous 4,000 million to the current 3,500 million euros.

“Lower deliveries have been driven by the supply chain for engines, interiors and aerostructures, not by demand,” Citi analysts point out.who have been forced, after the profit warning presented yesterday by Airbus, to lower its forecasts. The American firm highlights how Airbus management explicitly pointed out two aircraft engine manufacturers, CFM and Pratt & Whitney, two American companies “and marginally Rolls-Royce”, as those responsible for the “worsening supply chain” and This is striking for Citi because, although they were aware of the delays in the type of engine that P&W manufactures, the GTFs, which are the most efficient from an energy point of view, they were surprised that it mentioned CFM.

“In commercial aerospace, demand remains strong for the product portfolio, but the question of filling those orders remains dependent on the company’s ability (or not) to deliver new aircraft to customers at the desired pace. In the call it was said that the supply chain was causing a situation in which Airbus is now missing parts,” they comment in their analysis from Berenberg, which include the lack of engines (already mentioned), and, to a lesser extent, the interiors ” because The same suppliers face strong demand from airlines seeking to upgrade their current fleets due to a lack of new aircraft on the market.which supports our relative preference, for example, for Safran over Airbus,” they conclude.