Airbus reported a significant blow to its net profit in the first half of the year, with a staggering 46 percent decrease to 825 million euros ($890 million). This decline was primarily driven by a massive writedown in its space operations segment. The company’s commercial aircraft deliveries saw a modest increase of seven planes, contributing to a 4 percent rise in revenue to 28.8 billion euros.
An extensive review of the space business led Airbus to make a substantial charge of 989 million euros, higher than the previously estimated 900 million euros. Airbus CEO, Guillaume Faury, acknowledged that the half-year financial performance was significantly impacted by charges in the space business, which the company is actively addressing. The decision to adjust the forecast for 2024 operating earnings to 5.5 billion euros was due to supply chain constraints hindering aircraft production.
Airbus is grappling with specific supply chain challenges that are impeding the ramp-up of aircraft production. The company’s focus remains on deliveries and overcoming obstacles related to sourcing key work packages. The reduced target of delivering 770 commercial aircraft in 2024, down from the initial goal of 800, reflects the persistent supply chain disruptions affecting the industry.
While Airbus managed to increase aircraft deliveries in the first half of the year compared to the previous year, the second quarter saw a decline due to ongoing supply chain problems. Many suppliers, who downsized operations during the pandemic, are struggling to scale production levels back up. This bottleneck is limiting Airbus’s capacity to assemble more aircraft and fulfill its order backlog.
Airbus is confronting formidable financial challenges in the first half of 2024, largely driven by setbacks in its space business operations and supply chain disruption. The company’s proactive approach to addressing these issues and adjusting its forecasts demonstrates its commitment to navigating through the turbulent times ahead. By focusing on enhancing operational efficiency and managing supply chain complexities, Airbus aims to overcome the obstacles and drive sustainable growth in the future.
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