Airbus suffers major setback: stock market loss of 11.3 billion euros following reduction in 2024 production plan

Airbus experienced a significant drop in its stock market value, marking its largest decline in four years after admitting to being overly optimistic in its forecasts for the year. The company has had to reduce its aircraft delivery capacity due to issues in its supply chain and is facing accounting losses in its aerospace division. This has led to a cut in expected profits for 2024. By the end of the trading session, Airbus shares had dropped by 9.4%, translating to losses of around 11.3 billion euros.

At the start of the year, Airbus aimed to deliver 800 commercial aircraft, but this target has now been reduced to 770 due to supply chain problems affecting engines, aerostructures, and cabin equipment. The company has also postponed its goal of manufacturing 75 A320 family aircraft per month. Additionally, Airbus has acknowledged problems in its aerospace division, Space Systems, with additional charges now totaling 900 million euros.

As a result, Airbus has revised its operating profit forecast for 2024 to 5.5 billion euros, down 19% from previous estimates. The company has also adjusted its cash flow forecast to 3,500 million euros. Analysts have attributed the lower deliveries to supply chain issues with engine manufacturers CFM, Pratt & Whitney, and Rolls-Royce.

The supply chain challenges have affected Airbus’s ability to fulfill customer orders on time, leading to delays in production. Analysts emphasize the importance of addressing these supply chain issues to ensure the company can meet demand for its products. The analysts recommend a relative preference for certain suppliers over Airbus due to these challenges.