Airbus Lowers Delivery Targets Due to Slew of Issues

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00:00Let's get more on this. Bloomberg Global Aviation reporter Benedict Campbell joins us now.

00:04Benny, the issues that we've seen at Airbus over the past week, can you just describe

00:08the scale that they are? Because you're seeing this flip where Matt was pointing out Boeing

00:13does well, Airbus isn't. Are they on the same sort of scale of woes we saw at Boeing in years prior?

00:21Well, probably not is a short answer. Boeing has really come through a very, very rough patch

00:26over a number of years. And what we've seen here at Airbus is a slightly unusual sort of

00:30breakout moment for them in the negative sense. So it all started late last week. On Friday,

00:36they came out with this announcement saying that their software on the A320 aircraft needed

00:41upgrading. That happened surprisingly swiftly, I will say. That happened over the weekend

00:46when I saw the first number of 6,000 aircraft that needed the upgrade. I think most people

00:51thought this would be something that would take them well into sort of the rest of the month,

00:55maybe even next year. And by the end of the weekend, it was all done. But then problem

01:00number two arose out of nowhere, which was these panels that cover the aircraft. They

01:06have some of them that show some discrepancies versus the specs that are required. So what

01:11they're doing now is checking them all. And that's a sort of arduous process that will

01:15take a while. And that's essentially why you got sort of the hit this morning where they

01:19said, we won't be able to make our delivery targets for the year. We're going to be a

01:24smidge lower. The original target was for 820 aircraft. And now it's 790. They did keep

01:32the financial targets in place. And that might explain why the stock didn't fall off a cliff

01:37again. It had a really epic meltdown early in the week. But today it managed to sort of hold its gains.

01:43You know, I always look at the five year performance of Airbus versus Boeing. And when

01:49you when you zoom out that far, Airbus is just crushing it in terms of the stock, right? It's

01:56well over doubled. And meanwhile, Boeing is in the red. I've also heard you, Benny, talking about the

02:02A320 is, I believe, the world's most flown commercial aircraft, right? Are they completely

02:07dominant? That is correct. I mean, dominant is probably too big a word, but they have certainly

02:13come from nowhere. I mean, a while back, admittedly, in the in the late 80s. But, you know, Boeing

02:19back then was sort of the only game in town. And the A320 has really sort of taken taken

02:25that position away from Boeing. Obviously, they're still sort of neck and neck, shall we say.

02:30Boeing still wins a fair portion of the business. But these days, the A320 and its derivatives

02:36are the 321 and the XLR and all those types of planes. That's really where the action is

02:41right now. And it's put Boeing under considerable pressure. And that will explain that chart that

02:46you just showed. And a big part of the Airbus story is built around the A320, which would

02:52explain again why people are somewhat nervous about anything going wrong with that plane.

02:57Airbus does say we've got a handle on this. We have it under control. We'd rather slow things

03:02down and take the hit on the on the deliveries and make sure that everything is safe. But

03:07again, this is a plane that people look at very, very closely just because it's such a

03:12big money spinner for Airbus. Yeah. And we also saw just how many airlines

03:16had to cancel or delay their flights because of that. Benny, thank you so much. Bloomberg's Benedict

03:21Camel.

03:22Camel.