TLDR
- Airbus CEO Guillaume Faury reported ongoing supply chain problems with engines being the hardest components to source in 2025 and 2026
- The company is managing a large backlog of undelivered aircraft while customer demand stays strong
- Defense product orders are increasing as governments boost military spending
- Airbus plans to launch a new short-haul aircraft by decade’s end to replace the A320 family, entering service in the mid-2030s
- EADSF shares dropped 1.39% to $230.60 on Monday following the CEO’s comments
Airbus shares slipped on Monday after CEO Guillaume Faury acknowledged the planemaker’s struggle with supply chain bottlenecks. EADSF closed down 1.39% at $230.60.
Speaking at the World Governments Summit in Dubai on Tuesday, Faury pinpointed aircraft engines as the toughest components to obtain. The shortage has created a pileup of planes waiting to reach customers. Demand for aircraft hasn’t cooled off, but the company can’t deliver fast enough.
The supply crunch has hit particularly hard in 2025 and 2026. Faury didn’t sugarcoat it. Getting engines remains the primary headache for production timelines.
But there’s a bright spot. Defense orders are climbing as governments open their wallets for military hardware. This uptick could cushion the blow from slower commercial deliveries. The shift in spending priorities is working in Airbus’s favor.
Defense Boost and Chinese Competition
Faury confirmed acceleration in defense product demand. Countries are ramping up military budgets, and Airbus stands to benefit from that trend. The defense business could help balance revenue while commercial deliveries lag.
The CEO also addressed Chinese competitors like Comac. He’s taking them seriously but isn’t sweating it. Faury believes the market is big enough for new players. With sky-high demand, there’s room for everyone right now.
Airbus isn’t sitting still. The company plans to roll out a new short-haul aircraft by the end of this decade. This plane will eventually replace the A320 family. Service entry is expected sometime in the mid-2030s.
Earnings on the Horizon
Investors will get a fuller picture when Airbus reports fourth-quarter results on February 19. Wall Street expects revenues of $31.73 billion for Q4 2025. That would represent 9% growth compared to last year.
Analysts are forecasting earnings per share of $2.90 for the quarter. That’s a 5% bump from the same period in 2024. The numbers suggest steady growth despite the supply headaches.
The stock currently sits at $230.60 after Monday’s decline. Analysts maintain a Moderate Buy rating on EADSF. Nine analysts recommend buying the stock, while four suggest holding.
The average price target stands at $269.77. That implies potential upside of nearly 17% from current levels. Analysts remain optimistic about Airbus’s prospects.
Faury’s comments paint a picture of a company juggling competing pressures. Strong demand meets stubborn supply problems. Defense spending rises while commercial deliveries slow. The backlog grows while customers wait for planes.
The engine shortage shows no quick fix. Suppliers can’t flip a switch and produce more. Airbus will continue wrestling with this constraint through at least 2026.
The company faces Chinese manufacturers entering the market. Comac and others are building capabilities. Faury acknowledges the competition but sees enough demand to go around.
Faury spoke at the World Governments Summit in Dubai on Tuesday, outlining these challenges and opportunities facing the European aerospace giant.
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