Airbus Reports Progress After Supply Chain Reset

Airbus Reports Progress After Supply Chain Reset

Supply Chain Improvements Amid Persistent Challenges

At the Paris Air Show in Le Bourget, Airbus executives highlighted notable progress in the company’s supply chain performance since early 2024, describing the developments as a “real inflection point.” Florent Massou dit Labaquère, Executive Vice President of Operations, revealed that the number of missing parts in the production system has decreased by 40 percent compared to the start of the year. This improvement has brought the current supply chain stability to levels comparable with pre-crisis years such as 2018 and 2019. Despite this advancement, Massou emphasized that Airbus must continue to enhance its operational efficiency to meet the heightened production targets set for the coming years.

Airbus has maintained its production plans for 2024, having delivered 766 commercial aircraft so far, with a target of approximately 820 deliveries in 2025. These figures remain below the 863 aircraft delivered in 2019, prior to the global supply chain disruptions. The company aims to increase monthly production rates for key models, targeting 14 units of the A220 by 2026, 75 units of the A320neo family by 2027, and 12 units of the A350 by 2028. The A330neo is expected to sustain a production rate of four per month, although recent sales activity may prompt a future increase.

Strategic Reset and Supply Chain Management

Christian Scherer, CEO of Airbus Commercial, expressed confidence in the sustainability of these elevated production rates, particularly for the A220, and suggested the possibility of further increases. However, he acknowledged the challenges in securing supplier commitments, given the substantial costs and operational adjustments required to support these targets.

Over the past year, Airbus has fundamentally reset its approach to addressing supply chain bottlenecks. Massou explained that the company has gained a clearer understanding of the factors that have hindered suppliers from ramping up production. To mitigate these issues, Airbus has implemented measures including selective price increases, advanced cash payments, and the strategic buildup of its own inventory to cushion against temporary shortages. Scherer described inventory as “good cholesterol,” highlighting its importance as a buffer in the supply chain.

Despite these efforts, engine supply remains a significant concern. Material shortages have affected deliveries from key suppliers such as CFM, contributing to a 4 percent decline in Airbus deliveries in May 2025. CEO Guillaume Faury acknowledged the ongoing difficulties in meeting production goals, noting that airlines continue to exert pressure for timely aircraft deliveries.

Market Response and Future Outlook

Market reactions to Airbus’s progress have been mixed. The company has secured major orders, including ANA’s firm commitments for Airbus, Boeing, and Embraer jets, as well as a substantial order from Riyadh Air for A350-1000 aircraft. Nevertheless, Airbus faces continued pressure to fulfill delivery commitments amid strong demand and constrained production capacity. This environment has enabled the company to consolidate pricing, though the costs associated with strengthening the supply chain remain significant.

Scherer noted that further improvements in competitiveness and reductions in unit costs will depend heavily on achieving the planned higher production rates in the coming years. As Airbus strives to balance robust market demand with ongoing supply chain challenges, its ability to deliver on ambitious targets will remain under close scrutiny from customers and investors alike.