Airbus deliveries fell 4% in May, sources say

Airbus deliveries decreased by 4% year-over-year in May, totaling approximately 51 aircraft, according to industry sources. Year-to-date deliveries are down 5% compared to the first five months of 2023, as the planemaker faces increasing pressure from airlines regarding persistent supply chain-related delays. Airlines, convening in New Delhi, have criticized manufacturers for ongoing disruptions, with flyadeal's head deeming the delays "inexcusable."

Analysis

Airbus experienced a 4% year-over-year decline in aircraft deliveries in May, with approximately 51 units handed over, according to industry sources. This brings the year-to-date deliveries to around 243 aircraft, a 5% decrease compared to the first five months of the previous year. This slowdown in deliveries puts increased pressure on the planemaker, which aims for a 7% increase in full-year handovers to 820 aircraft. The persistent supply chain issues, particularly slow engine arrivals, are drawing criticism from airline customers, evidenced by comments from flyadeal's head calling the delays "inexcusable" during an industry gathering. While Airbus has indicated an expectation for these delays to stabilize over the summer, the current trend underscores significant operational headwinds and potential risks to achieving its annual delivery targets.

Key Decisions for Investors

• Investors should closely monitor Airbus's monthly delivery figures in the coming months, particularly through the summer, to assess if the anticipated stabilization in engine supply and production materializes.
• Consider the heightened risk to Airbus's full-year delivery target of 820 aircraft and the potential impact on revenue and profitability if current supply chain constraints persist.
• Evaluate the ongoing pressure from airline customers and the potential for strained relationships or order adjustments if delivery delays are not resolved effectively.