Airbus Seeks Balance: A220 Mega-Deal and A350 Service Push Offset Q1 Turbulence

Airbus secures up to 150 A220 jets from AirAsia X, a record for the program, while Q1 profits halve and shares rally 4% on the deal.

The European aerospace giant is navigating a quarter of stark contrasts. While first-quarter earnings took a hit and delivery timelines remain under pressure, Airbus is simultaneously finalising what could be the largest single order in the A220 programme’s history and deepening its push into the more predictable world of aircraft maintenance.

AirAsia X is on the verge of ordering up to 150 A220 jets, a deal that would mark a strategic pivot for the low-cost carrier. Having historically relied almost exclusively on the larger A320 family, the airline is now turning to the smaller, 100-to-160-seat A220 to open up thinner regional routes and operations away from major hubs. The move is central to AirAsia’s post-pandemic expansion plans, which include establishing a new hub in Bahrain as a gateway for European flights. For Airbus, the transaction would not only be a record for the A220 programme but also a decisive blow against rivals Embraer and COMAC in the battle for the narrowbody market.

The timing of the announcement offers a welcome lift. Airbus shares climbed over 4% on Monday to €44.20, a rally fuelled by relief that a major order is in the pipeline. The stock had been trading at deeply oversold levels, with its relative strength index plunging to 10.9, and remains down nearly 10% since the start of the year.

The share price weakness reflects a challenging start to 2026. Group revenue slipped 7% year-on-year to €12.7 billion in the first quarter, while adjusted operating profit more than halved. Administrative bottlenecks in China have delayed the handover of numerous aircraft, adding to the strain from ongoing supply chain disruptions and engine shortages that continue to constrain production.

Yet the order book tells a different story. Airbus ended the quarter with a record backlog of more than 9,000 undelivered aircraft, a figure that has been further swollen by recent commitments. China Southern Airlines and a subsidiary placed an order for 137 A320neo-family jets, underscoring the relentless global demand for fuel-efficient narrowbodies. The AirAsia X deal, expected to be formally signed this week, will cement that momentum further.

To smooth out the volatility inherent in aircraft sales, Airbus is also doubling down on aftermarket services. The European Commission gave the green light on 3 May for a new joint venture between Airbus and Air France-KLM focused on component maintenance for the A350 fleet. The partnership is designed to generate stable, recurring revenue streams that can help offset the cyclical swings in new aircraft deliveries. Analysts will now be watching closely for pricing details and the first external customers of the venture.

Despite the operational headwinds, management has held firm on its full-year guidance. Airbus still expects to deliver around 870 commercial aircraft in 2026, a target that hinges on resolving supplier bottlenecks and converting its swollen order book into completed deliveries. The central challenge for the months ahead remains clear: turn record demand into tangible output.