Airbus Sees Profits Halve as Delivery Bottlenecks Slow Jet Output

Airbus reported a sharp drop in its first-quarter operating profits, falling by more than half to 300 million euros compared to the same period last year. The sales figures came in slightly above forecasts at 12.65 billion euros, but profits lagged behind expectations, reflecting a challenging start to 2026.

The company managed to deliver 114 commercial jets in Q1, down from 136 a year earlier. This slowdown partly stems from a shortage of engines supplied by Pratt & Whitney, which has been dogging production schedules. CEO Guillaume Faury confirmed that negotiations with the engine manufacturer are ongoing, but emphasized that this wasn't the sole reason for the "weak" quarter.

Additional hurdles arose from administrative challenges affecting deliveries to Chinese customers, postponing about 20 aircraft handovers. These complexities have compounded the headwinds Airbus faces despite a record backlog exceeding 9,000 aircraft, underscoring the pressure to meet delivery commitments amid economic and geopolitical uncertainties.

On the revenue side, Airbus' commercial aircraft unit suffered an 11% drop in sales, whereas its defence and space segment saw a 7% uptick. Helicopter sales remained stable. The company reiterated its 2026 delivery guidance of 870 commercial aircraft, slightly below analysts' forecasts, holding firm that no further major supply chain or trade disruptions are anticipated.

Investor sentiment around Airbus appears cooler as Boeing gains momentum post-crisis. Boeing recently narrowed losses and improved commercial aircraft output, signaling a possible shift in competitive dynamics after years of troubles with the 737 Max and supply constraints. The aircraft manufacturer's struggle with supply chain issues seems to be easing on both sides, hinting at a cautiously competitive environment ahead.

Despite global geopolitical tensions and the conflict in the Middle East, Airbus reports minimal impact on order volumes and no cancellations so far. Interestingly, rising jet fuel prices could offer a silver lining: airlines are likely to lean on fuel-efficient models, a market where Airbus sees potential benefits. This dynamic adds a nuanced layer to the ongoing challenges and opportunities the company faces.

Faury indicated that while the current Middle East situation has not deterred customers, any prolonged elevation in fuel costs might require revisiting assumptions around aircraft demand. UBS analysts echo this sentiment, noting strong replacement demand could support Airbus prices even if fuel prices stay high through the third quarter.

With supply chain issues largely tied to Pratt & Whitney and geopolitical uncertainties in the mix, Airbus seems to be balancing operational challenges with robust order momentum. Whether these pressures ease or persist will shape the company's near-term trajectory and competitive standing against Boeing's resurgence.