Airbus Breaks A Record

Airbus has broken a record, with its backlog now exceeding 8,700 units as demand hits major levels.

The planemaker has been able to sell many aircraft recently, and sizable contracts as well as airlines have scrambled to secure their planes for the future.

Much of the intensity from airlines to commit to new planes follows a darker period during the COVID-19 pandemic, where airlines were forced to re-adjust their priorities and put greater emphasis on restructuring over growth.

However, as many of those global airlines exit restructuring, they can refocus on growing as a business to meet future demand, and, as a result, there’s renewed confidence in growth.

With this renewed confidence, airlines are once more turning to planemakers to either increase their available aircraft or transition from older generation planes to newer ones with higher levels of efficiency over the departing types.

But, with many airlines scrambling to purchase new aircraft based on their internal studies and plotting perfect delivery schedules, available slots for deliveries begin to disappear, making it harder for airlines that have yet to commit to aircraft for the future to get their new arrivals when needed.

Additionally, with Airbus running behind on deliveries already, what fills the backlog is already coming with delays that the manufacturer is attempting to work through.

To be able to work through this backlog in a healthy manner, it remains critical for the delivery perfromance of the planemaker to improve; this is one of the key risks for the business to progress moving forward.

While deliveries aim to reach 820 by the end of the 2025 calendar year, the start of this calendar year has been far from optimal, with slowed delivery rates seeing the gap between itself and American planemaker Boeing reduce considerably after years of significant distance between them.

But Airbus Faces A Challenge

While having a record-breaking backlog is a sign that there’s strong demand for air travel moving into the remainder of the decade and beyond, meeting that is the next challenge Airbus faces.

Following the COVID-19 pandemic, supply chains have been severely disrupted; these supply chains are crucial to the production of new commercial aircraft at Airbus and the continued delivery of planes to customers awaiting them.

However, with many complications, delayed delivery of parts, and Airbus’s inability to meet timelines laid out for deliveries at order have become a thing of the past, with no new aircraft arriving on time.

Instead, airlines are beginning to get accustomed to month-long delays, at times stretching into years, forcing them to adjust program launch dates, retirement dates of older aircraft and deal with the financial and operational stress involved in having a delayed delivery.

The quarter most recently ending in June showed the planemaker enjoyed a surge in deliveries; however, that surge, based on available data, was far weaker than the previous quarter.

The reduction comes from lower than expected A320neo family deliveries, deliveries across more programs were also slowed as Airbus faces major challenges, and with that a generalised inability to raise the production rates to levels required.

Ultimately, Airbus finds itself in a position where it is not in the slightest struggling to acquire new aircraft orders, and its backlog is reaching record levels, but there’s a challenge now in meeting that demand.

Airbus must find ways to lift deliveries year over year; current patterns do not indicate the planemaker will reach its 2025 delivery target, which is a cause for concern, resulting in this being yet another year where the annual target is not met.

With that being said, the planemaker would otherwise find itself in a strong position, it’s sorting out this avenue which remains the most pivotal, that’ll come with time, but finding ways to accelerate the process will be key where possible, doing so in a safe manner.