Managing Financial Resources (Mfr) Case Study For The September 2026 Examination

Sylvia Pfeifer

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Airbus S.E

Airbus shares fall more than 10% as plane maker cuts profit forecast

Image summary: A photograph of a JetBlue Airbus A320, registration N605JB, in flight with landing gear extended, positioned against a distant New York City skyline featuring One World Trade Center.

Shares in Airbus tumbled on Tuesday after the world's biggest plane maker cut its annual profit forecast as its supply chain disruptions worsened and it took a charge tied to its space business.

The company's supply chain has been beset by delays since the pandemic, but chief executive Guillaume Faury rattled investors after warning that a shortage of engines was again becoming a “significant issue”.

The fresh snarls mean that Airbus will deliver “around 770” commercial aircraft this year, down from a previous forecast of 800. It also pushed back its target of producing 75 a month of its best-selling A.320 family of jets from 2026 to 2027.

In contrast to 2022, when Airbus last had engine shortages, the group is now facing shortages from Pratt & Whitney as well as CFM International, both suppliers to the A.320.

“That is a new situation that we were not expecting,” said Faury, who delivered the warning after the close of the French stock market on Monday. “Engines that have not been an issue in 2023 and at the beginning of 2024 are again becoming a significant issue.”

Cabin parts were also in short supply, Faury added, as many airlines were refurbishing older aircraft given the challenge of securing new ones.

Shares in Airbus were down 12 per cent in afternoon trading. The warning hit the wider aerospace sector, with shares in engine maker Rolls-Royce falling 4 per cent and aerospace supplier Melrose Industries' shares declining 3 per cent.

Airbus has been hit over the past two years by supply chain constraints that have hampered its ambition to fully meet resurgent demand from airlines for new planes following the pandemic.

“The continuation of supply chain issues in commercial aircraft goes against the narrative of gradual improvement,” noted Robert Stallard, an analyst at Vertical Research Partners.

“For even the super-conservative Airbus to have got this outlook wrong is emblematic of how challenging this supply chain situation is, and again calls into doubt the [original equipment manufacturer] ramp plans,” he added.

It is the second time since 2022 that Airbus has pushed back its annual goal for deliveries. Faury had told an aerospace summit in Berlin earlier this month that he expected industry supply chain constraints to last for another two to three years.

Airbus also said it would record a charge of about €900mn in the first half related to its space systems business after a review of long-term programmes by new management.

It cited “complex and sophisticated products” that had created development risks. The company said it would “evaluate all strategic options such as potential restructuring, co-operation models, portfolio review and M&A options”.

The aerospace and defence group now expects adjusted earnings before interest and tax of €5.5bn this year, down from a previous forecast of as much as €7bn. Airbus reports results for the half-year on July 30.

The warning came as Airbus nears an agreement with Spirit AeroSystems to take over the work the U.S-based supplier does for some of its programmes, notably on the A.220 and A.350 aircraft. A deal will pave the way for {Boeing} to take over the bulk of Spirit, including its operations in Kansas.

Boeing has been in talks with Spirit since March as the U.S plane maker seeks to improve the supplier's manufacturing processes after the {mid-air blowout} of a section of the main body of one of its 737 Max aircraft in January. Spirit supplies Boeing with the fuselages and both companies are undergoing an audit by the U.S's aviation safety regulator.

Airbus has pushed back its target to produce 75 of its best-selling A320 family of jets from 2026 to 2027 © Charly Triballeau/AFP/Getty Images

Income Statement in eur

Year on year Airbus S.E had net income fall -10.78% from 4.25bn to 3.79bn despite a 11.37% increase in revenues from 58.76bn to 65.45bn. An increase in the cost of goods sold as a percentage of sales from 82.01% to 84.65% was a component in the falling net income despite rising revenues.

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Figure 1 summary: Two bar charts illustrate cash flow from 2019 to 2023. The first chart shows values fluctuating between 50b and 100b, starting high in 2019, dipping in 2020, and then steadily increasing through 2023. The second chart shows values near or below 0 in 2019 and 2020, followed by a sharp increase to nearly 5b in 2021 and 2022, with a slight decrease in 2023.

Cash Flow in eur

In 2023, Airbus S.E did not generate a significant amount of cash. However, the company earned 6.26bn from its operations for a Cash Flow Margin of 9.56%. In addition, the company used 4.13bn on investing activities and also paid 1.28bn in financing cash flows.

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Figure 2 summary: A bar chart depicting cash flow from 2019 to 2023. The cash flow peaked significantly in 2020 at approximately 6 billion, while the other years remained well below 2.5 billion, with 2019 and 2021 showing the lowest values.