Airbus stock price plummets 10%! Dozens of A320 aircraft exposed to quality issues, deliveries may be affected

Airbus shares plummeted due to quality issues with the A320 model, facing challenges to meet its annual delivery targets.

Media reports on Monday cited sources saying that the European aircraft manufacturer discovered industrial quality issues affecting the fuselage panels of dozens of A320 series aircraft, leading to delivery delays. This news heightened investor concerns about this popular model, which had just undergone an emergency software update over the weekend.

Airbus's stock price fell nearly 10% on Monday, marking its largest drop in eight months.

The exposure of this quality issue comes as Airbus races to complete its ambitious goal of delivering 820 aircraft this year, which may further impact its delivery plans for the end of the year.

Fuselage Panel Quality Defects Affect Delivery Progress

According to media reports citing informed sources, the industrial quality issues discovered by Airbus mainly affect the fuselage panels of the A320 series aircraft. The sources indicated that this suspected production defect is delaying the delivery of some aircraft, but there are currently no signs that the issue has affected in-service planes.

A person directly familiar with the situation revealed that some deliveries have already been impacted, but it is unclear how many aircraft are affected and for how long. The root cause of the problem has not yet been immediately determined.

According to industry sources, Airbus delivered 72 aircraft in November, below many analysts' previous expectations, bringing the total number of deliveries so far this year to 657.

Uncertain Prospects for Achieving Annual Delivery Targets

Airbus has set an annual delivery target of "approximately 820 aircraft," which means it needs to deliver more than 160 aircraft in December to meet the goal, setting a record for monthly deliveries. The previous record for December was 138 aircraft in 2019.

Analysts are divided on whether the world's largest aircraft manufacturer can achieve its delivery targets. These targets are directly related to revenue and cash flow, as airlines typically pay most of the aircraft price upon delivery.

Jefferies analyst Chloe Lemarie predicted a delivery volume of 71 aircraft in November, believing the month's performance was weaker than expected. However, in an investor report released before the quality issue news broke, she stated that due to increasing base production capacity, the delivery targets still have a chance of being achieved.

Independent aviation analyst Rob Morris believes Airbus may reach a delivery volume of around 800 aircraft, while others indicated that based on the wording of the forecasts, this might be sufficient to claim victory, but there is a "slightly lower" risk regarding the final outcome.

Recent issues with the Airbus A320 series aircraft include engine problems requiring maintenance for new A320neo aircraft powered by engines from Pratt & Whitney, a subsidiary of RTX Corp., forcing hundreds of aircraft to be temporarily grounded for maintenance.

The software update implemented over the weekend affected approximately 6,000 A320 series aircraft, further increasing investor concerns about the reliability of the model. The series of issues comes at a critical time as Airbus strives to achieve its annual delivery targets, adding extra pressure to the company's operations