Airbus SE Chief Executive Officer Guillaume Faury said supply constraints will persist until the end of next year as he revealed the full extent of the crisis gripping the firm’s multitude of component producers.
(Bloomberg) — Airbus SE Chief Executive Officer Guillaume Faury said supply constraints will persist until the end of next year as he revealed the full extent of the crisis gripping the firm’s multitude of component producers.
Soaring inflation and energy bills, raw-material shortages, a labor squeeze and disruption to Chinese parts makers amid continuing coronavirus lockdowns are combining to extend disruption, Faury said at a conference in Brussels Tuesday.
“The supply chain crisis is going to be longer than we thought a couple of months ago, more challenging and more difficult,” the CEO said. “I would not expect things to start getting better before the middle of next year. And we don’t expect the situation to be normalized before the end of next year.”
While some issues have eased, such as an engine shortage that left two dozen otherwise flight-ready aircraft waiting on turbines earlier this year, Faury reeled off a list of problems still afflicting production. The supply squeeze comes as Toulouse, France-based Airbus races to meet an already reduced annual delivery goal of 700 jets in the final few weeks of 2022.
The energy crisis will weigh particularly hard on smaller, power-intensive producers, such as those making castings and forgings or relying on high-temperature autoclaves used to produce composites, Faury said at the ASD aerospace industry association event.
A shortage of computer chips meanwhile continues to affect availability of micro-electronic components vital to a wide array of on-board equipment, while a raw-material squeeze is impacting everyone from wing and airframe producers to firms making small metal brackets.
China, Labor
Chinese lockdowns are taking a toll even quite low down the supply chain, reflecting how deeply intertwined Airbus production is with the Asian nation, Faury said, while a shortage of skilled labor is being felt across the industry, from bigger brands to small suppliers that may lack the exposure to attract younger people.
In July, Airbus downgraded its full-year delivery goal from 720 aircraft, and needs to accelerate production over the next few years as it seeks to churn out 75 of its best-selling A320 single-aisle jets a month by 2025.
Faury reiterated that there’s some evidence the long-haul travel market is showing signs of recovery, a positive signal for wide-body aircraft like the Airbus A350. For single-aisle models, the backbone of most commercial fleets, demand is stronger than supply, he said.
(Updates with CEO’s comments on range of supply issues from second paragraph)
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