Flyadeal airline CEO blasts Airbus over 'inexcusable' delivery delays

Flyadeal CEO Steven Greenway has publicly criticized Airbus for "inexcusable" delays in narrow-body jet deliveries, expressing concerns that similar disruptions could impact the airline's recent order of A330neo wide-body aircraft. Greenway stated that Flyadeal has only received two of the expected four narrow-body jets in the first half of the year, with further delays anticipated, impacting pilot training, route planning, and potentially requiring wet-lease agreements to cover capacity gaps. While Airbus has acknowledged supply chain challenges and aims for 820 deliveries this year, Greenway's comments reflect broader industry frustration with persistent supply chain issues affecting aircraft manufacturers.

Analysis

Flyadeal's CEO, Steven Greenway, has publicly characterized Airbus's (AIR.PA) ongoing narrow-body jet delivery delays as "inexcusable," citing a lack of transparency and significant disruption to the airline's operational planning, pilot training, and route expansion. Flyadeal has received only two of the four narrow-body aircraft anticipated in the first half of the year, both of which were delayed, and Greenway expressed strong doubts about receiving three A321neos scheduled for the fourth quarter, noting these are "delays on top of delays." These concerns now extend to a recent order for ten A330neo wide-body jets, with Greenway preemptively planning for potential delays by exploring wet-lease options, exemplified by an agreement with Cebu Pacific for two A320s. This situation reflects mounting private frustration among airline CEOs with persistent post-COVID supply chain disruptions impacting manufacturers, including a specific slowdown in engine arrivals from CFM (GE.N, SAF.PA) on the Airbus assembly line, which has left two Flyadeal jets grounded in Toulouse for months without a resolution in sight. While Airbus declined to comment directly on the narrow-body delays, it has previously reported some supply chain improvements and maintains a target for 820 total deliveries this year; however, Reuters reported Airbus has warned airlines that a pattern of delays could persist for another three years, and lessors foresee supply tensions for the rest of the decade. The strongly negative sentiment score for Airbus (-0.8) reflects the market's concern over these production challenges and their implications.

Key Decisions for Investors

• Investors in Airbus (AIR.PA) should closely monitor its ability to meet the stated 820-delivery target for the year and any further communications regarding the mitigation of supply chain bottlenecks, as persistent failures could further pressure earnings and stock performance.
• For those invested in the airline sector, particularly carriers awaiting significant fleet additions, it is crucial to assess their exposure to increased operational costs from measures like wet-leasing and the potential impact of constrained capacity growth on profitability stemming from these widespread aircraft delivery delays.
• Shareholders of GE Aerospace (GE.N) and Safran (SAF.PA), co-owners of CFM International, should scrutinize updates on engine production ramp-ups and supply chain normalisation, as their performance is directly linked to the output capabilities of airframe manufacturers like Airbus and Boeing.