Airbus profits fall as engine problems stall deliveries

European planemaker Airbus said on Thursday that net profits fell 17% to Euros 1.5bn ($1.8bn) in the first half of the year due to problems with the engines for the new version of its top-selling A320 jet.”The commercial aircraft environment remains healthy while the robust order backlog continues to support our production ramp-up plans. However, we are facing challenges due to ongoing engine issues,” Chief Executive Tom Enders said in a statement. The company said its expects to “deliver more than 700 commercial aircraft which depends on engine manufacturers meeting commitments”. The firm has booked thousands of orders for the updated version of its A320, which largely relies on new engines to provide airlines with lower fuel use, but problems with the engines provided by one supplier have dogged the programme. Airbus said close to 200 A320neo deliveries are still targeted for 2017 but this objective is more challenging given the engine issues. Revenues dipped marginally compared to the first half of last year to Euros 28.7bn, although revenue from commercial aircraft rose by 3% as deliveries rose to 306 aircraft from 296. Airbus shares fell by 3.3% in early trading, while the CAC 40 index was up around 0.3%.

Source: Civil Aviation Authority, Qatar