Airbus Aiming High in 2024 Despite Supply Chain Issues
Airbus is undertaking to deliver more aircraft in 2024, despite serious and ongoing supply chain problems, its CEO says.
In its most recent annual earnings report, the company revealed healthy results for its commercial aircraft business, with revenues up 11% to €5.8bn (US$6.2bn). Airbus has also set a 2024 target of 800 commercial aircraft deliveries – 65 more than in 2023.
CEO Guillaume Faury says the company is monitoring its suppliers' investment rates and their supply chain management to “ensure they can keep up with Airbus production increases”, and he added the company “will continue to invest, modernise, and adapt our global industrial system and our supply chain”.
One of its key suppliers – Spirit AeroSystems (which also supplies Boeing) – has experienced losses and cash flow issues.
Earlier this month, Spirit withheld financial guidance for 2024, pending price negotiations with Airbus, and also more information from Boeing on the production of the problematic 737 Max, which has been rocked by safety concerns after an emergency door panel blew off a 737 Max 9 jetliner last month.
Regarding Spirit, Faury says Airbus is “discussing a lot of parameters of the contractual relationship with them”.
He added that the company supports its suppliers by “bolstering their industrial capabilities rather than offering direct financial assistance”.
Faury also revealed that, to mitigate the risk of supply chain disruption, Airbus has grown its supply chain management team by 150% over the past two years.
Airbus 'closely monitoring suppliers in trouble'
In addition, the company also now deploys supply chain personnel to critical supplier sites, and says it “closely monitors suppliers in financial distress to avoid supply chain disruptions”.
Faury said the strength of any link on the supply chain “depends on the type of activities, their geographical position, and how easy they can hire and train people”.
He continued: “The complexity of managing a supply chain with thousands of suppliers, and the critical path we have on ramp-up, is a constant effort.
He added that the company progressed its increased production levels “against a backdrop of an operating environment that remains complex and affected by supply chain challenges and geopolitical conflicts” – something he describes as “quite an achievement”.
It should be noted that Airbus has a direct relationship only with certain suppliers of airline programs. This is because a number of parts are so-called ‘buyer-furnished equipment’, meaning that in many instances it is up to Airbus customers to help it address supply disruptions.
France-based Airbus was founded in 1970 and competes with Boeing for market dominance. It has production and assembly facilities worldwide, and its commercial aircraft, including the A320, A330, A350, and A380 categories.
It also manufactures military aircraft, helicopters, and provides defence and space-related services.
