Airbus has confirmed that it is dealing with a new industrial quality problem involving the metal panels used on some of its A320-family aircraft, Reuters reported. This comes right after the company had to recall over 6000 jets to fix a software glitch.
Airbus hit by new A320 quality issue
Earlier, Reuters reported that Airbus had found issues with the fuselage panels on several dozen A320-family planes. Because of this, some aircraft deliveries have been delayed.
Airbus said the good news is that none of the affected panels were installed on aircraft already flying. But despite that, the news sent the company’s stock tumbling, shares dropped by as much as 11% before closing nearly 6% lower.
The company in a statement said, “Airbus confirms it has identified a quality issue affecting a limited number of A320 metal panels. The source of the issue has been identified, contained and all newly produced panels meet all requirements.” A spokesperson of the company added that the problem came from one of its suppliers, though they did not name the company.
According to the Reuters report, Airbus uses both in-house and external suppliers for its aircraft structures. The front of the A320 fuselage is generally made in France, meanwhile, the rear comes from Germany.
Some upper panels are made by Airbus itself, while the rest involve multiple outside suppliers. The company had earlier recalled more than half of the global A320 fleet over the weekend. This forced major airlines to halt operations globally, with India and the United States being among the most affected.
Impact on shares
According to CNBC, shares of European aerospace giant Airbus fell as much as 10% during the day. By the end of Monday’s session, the stock had closed 5.8% lower, making it one of the worst performers on the Stoxx 600, a major European stock index.
Meanwhile, American Airlines shares slipped 0.2%, Delta Air Lines shares rose 0.3%, as markets reacted to the ongoing situation.
Shares of Thales, the French company that supplies the flight system software used by Airbus, were also down. Thales stock fell about 2% on Monday.
This quality issue comes at a time when Airbus is trying hard to meet its already tough delivery targets for the year. The company’s deliveries in November turned out to be lower than expected. This dragged down shares of airlines that buy Airbus jets too, including Lufthansa and easyJet, traders said.
A person familiar with the situation told Reuters that some aircraft deliveries are already being affected, though the exact number and the timeline are still unclear. Airbus said that “only a portion” of the jets will require extra work.
“It was already a big ask for Airbus to hit that 2025 delivery number, and so these fuselage issues could not have come at a worse time,” the Vertical Research Partners aerospace expert told Reuters. “Demand for the jets is strong,” he added.
Industry sources told Reuters that Airbus delivered 72 aircraft in November, which is less than many analysts predicted. This brings the total deliveries for the year so far to 657. Airbus is still aiming for “around 820” deliveries this year. To achieve that, it would have to deliver over 160 aircraft in December alone.
