Airbus wrestles with three problem planes

london — Airbus SE said three problem aircraft programmes are set to remain a bugbear for the rest of the year after weighing on earnings in the first quarter.

The planemaker is waiting on a fix for glitches afflicting engines on its new A320neo narrow-body jet, while production delays persist on the twinaisle A350, Airbus said Thursday. And talks with European governments on stemming cost overruns on the A400M military transport are likely to stretch into 2018.

Airbus earnings fell by more than 50 per cent in the three months as deliveries of its newest civil models were held up, with the company’s full-year guidance dependent on it achieving significantly higher build rates in the second half. Pratt & Whitney’s proposed solution to the A320 engine issue looks promising but needs to be verified, it said.

“Let’s see whether the fixes coming through are finally confirmed,” chief financial officer Harald Wilhelm said on a conference call. “We still need to see the proof. Demonstrated performance so far is not satisfactory.”

Airbus shares fell as much as two per cent after the Toulouse, France-based company said three-month earnings before interest and tax fell to €240 million ($262 million) from €498 million a year earlier. That fell short of the €326 million estimated by analysts. Deliveries of the A320neo have been slowed by the overheating of Pratt’s new gearedturbofan engines, causing Airbus to prioritise production of an older, lower-margin variant. With the US supplier saying Wednesday that regulators have backed a solution for a faulty carbon seal, Wilhelm said Airbus is taking that in good faith and targeting 200 deliveries in 2017, up from just 26 in the first half. More A320 “classics” could be built if need be, he said.

Progress is being made in resolving supplier issues with the A350, which has suffered a shortage in interior fittings and seats from beleaguered Zodiac Aerospace, Airbus said, though Wilhelm cautioned that Zodiac still needs to improve both production rates and build quality. — Bloomberg