Airbus Faces Engine Supply Challenges

By Tim Hepher

BRUSSELS (Reuters) – Airbus CEO Guillaume Faury stated on Tuesday that the company may alleviate an engine supply bottleneck and meet its year-end targets. He told Reuters that CFM International should be able to supply enough units, but it will be "very tight".

A shortfall in engine supplies from CFM, co-owned by GE Aerospace and Safran (EPA:SAF), has contributed to sluggish Airbus jet deliveries since the summer. This situation leaves Airbus with approximately 200 jets to deliver in the last two months to reach a 2024 goal of "around" 770 jets—a target that some analysts deem increasingly unrealistic.

When asked about CFM's ability to release sufficient engines to meet Airbus's end-year goals, Faury replied, "In the short term it is very tight … I will only know for sure at the end of November." He added, "It should be ok; I don't know yet. It will be within a few engines—not tens of engines—if any."

CFM, which had no immediate comment, is one of two suppliers for the narrowbody A320neo family, Airbus's best-selling jet, competing with RTX unit Pratt & Whitney, which has also faced setbacks.

Like other engine manufacturers, CFM has had to balance competing demands for new jet production engines and those for existing planes' repairs, all while trying to stabilize a weakened supply chain. This balancing act has led to visible tensions between Airbus and its largest engine supplier over the summer when Airbus reduced its 2024 delivery target to "around" 770 jets from 800 due to supply issues at CFM and other parts makers.

However, Faury, speaking to Reuters on the sidelines of an industry event in Brussels, expressed a more positive outlook, noting that the supply chain had been further strained by the impact of Hurricane Milton. "They (CFM) are serving us reasonably well given those circumstances," he remarked.

Airbus delivered 62 jets in October, bringing the total for the first ten months of the year to 559. Some analysts have indicated that Airbus may need to lower its guidance again by the end of November if conditions do not improve. The company is expected to utilize flexibility in its target wording to justify deliveries as low as 750 without formally downgrading its numbers.

Out-producing Boeing (NYSE:BA), which is emerging from an internal crisis, Airbus is relying on timely engine and parts deliveries such as seats and landing gear to achieve a last-minute surge in deliveries this year. However, analysts warn that it must navigate a supply chain weakened by the pandemic and shortages of parts and labor, rendering its industrial targets precarious.