Airbus Faces a Cashflow Squeeze as Delivery Snags Undermine a Record Order Book

Airbus delivered 114 jets in Q1, down from 136 last year, while net orders hit 398. Free cashflow plunged to -€2.48B, but shares rose 1% as investors eye long-term demand.

The disconnect between Airbus’s swelling order book and its ability to get planes out the factory door has rarely been starker. The European planemaker handed over just 114 commercial aircraft in the first quarter, down from 136 in the same period last year, while net orders surged to 398 after cancellations. That mismatch sent the free cashflow before customer financing into a tailspin, plunging to minus €2.48 billion from a positive position a year earlier.

The shares, however, told a more nuanced story. They edged up just over 1% after the April 28 quarterly update, suggesting investors were willing to look past the near-term pain and focus on the underlying demand. Yet the stock also closed nearly 3% lower on the day at €42.40, some 10% below its 200-day moving average — a level that captures the market’s ambivalence about the pace of the production ramp-up.

Triebwerk Troubles and a Chinese Hiccup

The operational bottleneck is twofold. Pratt & Whitney’s inability to deliver enough engines for the hot-selling A320neo family remains the most stubborn constraint. Chief Executive Guillaume Faury described the situation as a dead end that will hamper the production ramp-up well into 2027, and the company is now exploring legal avenues for damages against the supplier.

A separate administrative logjam in China temporarily held back nearly 20 aircraft, though management says that issue has now been resolved. The cumulative effect was stark: revenue slipped 7% year-on-year to €12.7 billion, while adjusted operating profit more than halved to €300 million. Even so, net income came in at €586 million, well ahead of analyst estimates of around €265 million.

Holding the Line on Full-Year Targets

Despite the weak start, the board is sticking with its 2026 guidance: roughly 870 deliveries, an adjusted EBIT of about €7.5 billion, and free cashflow before customer financing of roughly €4.5 billion. The caveats are unusually explicit — no further disruptions in supply chains or global trade.

To hit those numbers, Airbus will need a dramatic acceleration over the remaining three quarters. The first-quarter adjusted EBIT of €0.3 billion on €12.7 billion in revenue is a reminder that ramp-up costs and investment are weighing on margins, with earnings per share of €0.74. Research and development spending alone consumed €730 million in the period.

Defence and the A321XLR Offer Counterweight

A bright spot emerged in the defence and space division, where adjusted EBIT rose to €130 million from €77 million a year earlier. Order intake in the unit doubled to €5 billion, and the newly unveiled SAETA II Spanish combat training system — a fleet of 30 aircraft led by Airbus in partnership with Turkish Aerospace — adds further momentum.

On the commercial side, a concrete milestone arrived on April 24 with the first delivery of the A321XLR to Air Canada. The long-range narrowbody is designed to bridge short-haul and long-haul markets and is central to the company’s margin improvement story. Airbus is also holding steady on widebody production targets: 12 A350s per month by 2028 and five A330s monthly by 2029.

The broader order backlog now stands at over 9,000 aircraft, a figure that underscores the structural demand even as near-term execution falters. Boeing, for its part, capitalised on Airbus’s struggles by delivering 143 jets in the quarter, a rare lead for the US rival.