Airbus Suffers Cash Outflow as Engine Woes Delay Deliveries

Airbus SE reported a larger-than-expected cash outflow in the first half of 2025, primarily driven by critical engine shortages for its bestselling A320neo jets, which significantly hampered aircraft deliveries to just 306 units—the lowest volume since 2022. This operational bottleneck left 60 newly built aircraft grounded without engines by the end of June, a backlog the company aims to resolve by year-end, underscoring persistent supply chain vulnerabilities impacting the planemaker's financial performance and delivery targets.

Analysis

Airbus SE is facing significant operational and financial headwinds, evidenced by a larger-than-expected cash outflow in the first half of 2025. The core issue stems from a critical supply chain failure, specifically a shortage of engines for its bestselling A320neo aircraft family. This bottleneck has directly suppressed production output, with first-half deliveries falling to 306 planes—the lowest volume since the pandemic-recovery year of 2022. The problem's severity is quantified by the 60 newly built aircraft that were grounded without engines at the end of June, representing a substantial amount of locked-up working capital. While management has provided guidance aiming to clear this backlog by the end of the year, the situation highlights a persistent vulnerability that directly impacts the company's ability to convert its order book into revenue and free cash flow.

Key Decisions for Investors

• Investors should closely monitor monthly delivery figures and communications from engine suppliers for evidence that Airbus is on track to meet its year-end goal of resolving the 60-aircraft backlog.
• Expect continued pressure on free cash flow and working capital in the upcoming quarter, as the delayed deliveries will defer substantial revenue and cash receipts.
• Consider this a critical test of Airbus's supply chain resilience; a failure to resolve the engine shortage promptly could signal deeper structural issues, while a successful resolution may present a buying opportunity for those confident in long-term demand.