When you’re carrying out conventional or online stock trading, it is important to remember that customer satisfaction affects market perception and eventually the value of a stock. Airbus could have a tough time managing customer satisfaction since it is unable to meet delivery requirements of its popular jets, due to no fault of its own.
The Airbus Group ($EADSY) is having trouble meeting its delivery targets because of delays reported by its engine and component suppliers. Strong demand has caused Airbus and Boeing ($BA) to increase output of their jets.
However, this has increased their troubles in managing component suppliers who are unable to keep up with the increased demand. Airbus has assured that it expects its full-year delivery targets - coming to at least 650 aircraft - to be met though United Technologies Corp., its engine supplier, sounded a warning that it would be falling short of its plans.
Airbus A350 and A320neo
Airbus is struggling to deliver its long-range A350 jet with Zodiac Aerospace SA, its cabin equipment provider, falling behind in producing certain components. The narrow-body A320neo is powered by engines from Pratt & Whitney, whose delivery has also been delayed. A rival engine is also provided by the General Electric Co. – Safran SA joint venture, which helps matters though the latter’s engine development is six months behind that of Pratt & Whitney.
Delivery of around 12 Airbus A320neos could be significantly affected by this delay in engine delivery, according to an expert analyst. Early planes sold typically come with great discounts which helps Airbus to limit the financial loss arising from lower deliveries. Airbus now plans to deliver older A320 single-aisle versions to meet its delivery target. It has currently managed to deliver 19 A320neo jetliners, 15 of which were fitted with the Pratt & Whitney engine. The slight delay that occurred with this engine was because of some early flaws that were being addressed by the engine company.
Bombardier Struggling As Well
Bombardier Inc. ($BDRBF) is also struggling to meet its delivery orders. The Canadian plane manufacturer had to cut its delivery guidance from 15 to 7 planes for the new CSeries aircraft that incidentally also uses the Pratt & Whitney engine. The engine company’s failure to deliver the required engines on time has been blamed by Bombardier for the plan change. The onus is now on Pratt & Whitney to clear the backlog, or else it would be hard for plane manufacturers to live up to their delivery responsibility.
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