Airbus shares ended Monday’s session with a sharp drop, pressured by the discovery of a new quality control problem in its A320 family of aircraft, the construction company’s best-selling model. The incident caused a devaluation that reached 11% during negotiations, eclipsing the company’s efforts to resolve a previous computer failure.
According to Reuters, Airbus confirmed the existence of defects in metal panels on the fuselage of a limited number of aircraft. Although the company guarantees that the problem is identified and contained, the markets’ reaction was immediate and severe, with shares closing the day with a 5.9% drop in value.
Investors’ nervousness is due to the accumulation of bad news in a short space of time. This structural problem comes just days after Airbus was forced to recall more than half of the A320 family fleet to fix a software vulnerability related to solar flares.
Although the software update was implemented more quickly than anticipated, news of a physical defect in the fuselage — coming from a supplier Airbus declined to name — shook confidence in the company’s ability to meet its annual targets.
The impact extended to the construction company’s customers, with shares in airlines such as Lufthansa and EasyJet being dragged into negative territory.
Delivery targets at risk
The central issue for the market is the logistical impact. According to sources cited by Reuters, the problem affects around 50 planes, which could delay crucial deliveries in this final stretch of the year.
Industrial data indicates that Airbus delivered 72 planes in November, a number below analysts’ expectations. With a cumulative total of 657 deliveries this year and an ambitious target of “around 820”, the construction company now faces a difficult — if not impossible — task to achieve. To achieve the objective, it would have to deliver more than 160 planes in December alone.
Rob Stallard, an analyst at Vertical Research Partners, classified the required performance as “astronomical” to Reuters, stressing that “these fuselage problems could not have arisen at a worse time”.
Although Airbus claims that “only a portion” of the affected planes will require additional intervention and that there are no aircraft in service with this defect, uncertainty regarding the exact volume of delays continues to penalize the company’s stock market valuation.