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Airbus 2018 delivery goal questioned by analysts ahead of results


© Reuters. Airbus 2018 delivery goal questioned by analysts ahead of results

By Tim Hepher

HONG KONG (Reuters) – Airbus (PA:) will have to equal a record final quarter for deliveries if the European planemaker is going to meet its overall 2018 targets following a series of production setbacks.

Flight Ascend, a UK-based consultancy which monitors fleet developments worldwide, told aircraft investors in Hong Kong that Airbus may struggle to meet its target for 800 total aircraft deliveries this year.

And Bernstein analyst Douglas Harned said in a note that Airbus faced a shortfall in deliveries of its best-selling A320neo due to ongoing engine delays and operational problems.

The warnings came as Airbus prepares to post third-quarter earnings on Wednesday, when all eyes will be on whether it keeps its full-year target of 800 jet deliveries.

By end-September, Airbus was already facing a tough – though not unprecedented – challenge in meeting its full-year goal, a Reuters analysis of delivery data shows.

To meet the goal it would have to repeat exactly the record pattern of 2017, when 37 percent of the total number of annual deliveries were squeezed into the final quarter.

Airbus “usually pulls a rabbit out of the hat, so I wouldn’t bet against it,” a financial source familiar with the process said, adding delays had stressed the global aircraft industry.

For the first nine months, Airbus delivered 503 aircraft, leaving it once again with 37 percent of the targeted annual figure to accomplish in just three months.

The average achieved over that quarterly period in the past 10 years was 31 percent, according to a Reuters review of Airbus data.

Crucial to whether Airbus meets its goal is progress on best-selling single-aisle jets like the A320 and A321.

Commercial jets make up 76 percent of Airbus revenues, which are mostly paid on delivery, while aircraft lessors, who control around half the global fleet, lose $10,000 a day for a late A320-family jet, experts said.

Airbus does not publish separate delivery targets for single-aisle jets but Flight Ascend estimates this year’s target at around 630, leaving 76 a month to go in the last quarter.

“October numbers are sitting in the mid-50s which means it … is very challenging to reach the target for the end of year,” Ascend’s Ryan Hammacott told a Hong Kong seminar.

Earlier this month, Reuters reported Airbus faced new problems in producing the A321neo, a model central to its ambition to dominate the top end of the single-aisle market and thwart Boeing’s (N:) plans for a new mid-sized passenger jet.

Last week Rolls-Royce (L:) disclosed a shortfall in engine deliveries for the big A330neo.

Airbus planemaking president Guillame Faury last week confirmed Airbus was facing internal problems with the A321neo, but declined to discuss any impact on the delivery target.

Faury, who is the designated future Airbus chief executive has made stabilising deliveries a top priority.

Harned said stock markets may absorb a downgrade in the delivery target but would watch for any signs of stress in 2019.





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