By Tim Hepher
PARIS (Reuters) - Airbus deliveries rose sharply to more than 80 jets in November as the planemaker recovered momentum towards end-year targets after a downturn over the summer, industry sources said.
After a mid-year profit warning driven in part by a shortfall in engine supplies, deliveries spiked higher in November after engine maker CFM and Airbus reached a deal over short-term engine supplies, first reported by Reuters last week.
Industry sources said deliveries jumped at least 25% in November from the same month last year to top the 80 mark, bringing deliveries this year to 640 jets and leaving some 110 to go. In December last year, Airbus delivered 112 jets.
If confirmed, it would be the highest November tally since 2018 when Airbus delivered 89 jets.
That is in stark contrast to U.S. rival Boeing (NYSE:BA) which has indicated it will resume output slowly following a bruising strike in order to avoid damaging a fragile industrial fabric, while also remaining under close scrutiny of U.S. regulators.
UK-based consultancy Cirium Ascend said it estimated that Boeing delivered around 12 jets in November.
Although far in front, Airbus is struggling to capitalise on its gains because it is sold out and faces fragile suppliers.
It is officially targeting "around 770" deliveries for the full year after lowering the goal from 800 aircraft in July.
Few analysts expect it to reach the new headline figure after a series of supply snags, but many say the cautious wording of the forecast gives it the flexibility to deliver as few as 750 jets without triggering a new warning to investors.
"While the (full-year) 770 may now be out of reach, we still see... 765 as achievable," said Jefferies analyst Chloe Lemarie, who estimates Airbus delivered 85 jets in November.
Others cautioned Airbus would need to keep up a strong pace to reach targeted deliveries, which propel revenues and cash.
"Last week looks to be the change needed to get close to their target," said Rob Morris, head of global consultancy at Cirium Ascend.
"The only question I have now is: have they rinsed their stock or can they keep averaging four per day for the next 30 days?"
SUPPLY PENDULUM
Jet engine maker CFM, co-owned by GE Aerospace and Safran (EPA:SAF), agreed last month to divert some engines to Airbus as the planemaker tries to catch up on previous delivery delays, Reuters reported last week.
The agreement follows tense negotiations over the allocation of engines between new assembly lines and the repair shops where airlines carry out maintenance to keep existing planes flying.
Speaking to AFP in Belgium last week, Safran CEO Olivier Andries confirmed that CFM had prioritised Airbus over airlines on a temporary basis to boost jet deliveries in 2024.
The pendulum is expected to swing back towards the aftermarket in time for January, when Airbus slows down.
Some analysts have voiced concerns that the switch in engines could dent margins for the engine companies, since engine makers make more of their income out of high-margin activities in the aftermarket than in equipping new aircraft.
But Bernstein analyst Douglas Harned said in a note that CFM could flip engine supplies to Airbus planned for November and December in order to help the planemaker prepare for a busy end to the year while meeting its own targets for sales of spares.
CFM has said it is working both to meet demand from customers and to maximise fleet utilisation for airlines.