PARIS (Reuters) -Airbus posted weaker than expected first-quarter operating profit and cashflow partly after hiring more staff to prepare for rising demand, but reaffirmed its financial goals for 2024 after a nervous start to the year on industrial costs.
The world’s largest planemaker also announced a higher output target for its wide-body A350 model, of 12 a month in 2028, amid a renaissance in demand for long-haul jets.
Airbus reported 577 million euros ($618.37 million) in adjusted operating profit, down 25% on the year, revenue of 12.83 billion euros and a free cash outflow of 1.8 billion euros. Analysts were on average expecting operating profit of 789 million euros and an outflow of 1.3 billion euros, according to a company-compiled survey.
Jet demand is soaring, buoyed by recovering air travel and fears of a shortage of planes as supply chains struggle to overcome bottlenecks, some existing planes remain grounded by maintenance delays and rival Boeing remains mired in crisis.
“Geopolitical and supply chain tensions continue,” Airbus CEO Guillaume Faury said in a results statement, adding the operating environment “shows no sign of improvement”.
Airbus said it was making progress towards its core industrial target of producing 75 narrow-body A320neo-family planes a month in 2026, up about 50% from today’s unpublished level, according to industry sources.
Airbus is incurring up-front costs as it braces for this ramp-up, its finance chief told Reuters this month.
Industry sources have previously said spending was running over-budget in the civil business during the first quarter.
Airbus said it would increase production for its A350 wide-body jet to 12 month in 2028. Its current goal is 10 a month in 2026. It continues to target 4 a month for the A330 this year.
Wide-body sales have been rising after a wave of retirements of older planes during the pandemic coincided with the end of a long period of weakness for the industry’s big long-haul jets.
($1 = 0.9331 euros)
(Reporting by Tim Hepher; Editing by Kirsten Donovan and Josie Kao)
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