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Airbus could miss its 2020 delivery targets as customers ask for delays

Toulouse, France - Airbus was planning to deliver a record number of aircraft this year but this goal might be at risk as airlines request delivery delays due to the Covid-19 outbreak.

Chinese airlines are the worst affected carriers from the outbreak and have already deferred deliveries of some Airbus jets through April. Malaysian low-cost AirAsia X became the first airline to push back deliveries after Chinese operators. AirAsia X is the biggest customer for Airbus' A330neo. Its decision to defer deliveries led the European planemaker to weigh a cutback in the production rate of the widebody jet.

Another delay announcement came from the Australian flag carrier Qantas today. The airline decided not to firm up an order for 12 A350-1000 jets that had been planned for "Projet Sunrise" routes.

Airbus is tracking carriers’ willingness to take jets, and may decide whether to lower the 2020 target from about 880 deliveries as soon as next month, one of the people said. A spokesman declined to comment on individual customers but said Airbus is closely monitoring the situation and its impact on clients and the supply chain.

A cut in annual targets at Airbus or U.S. rival Boeing would represent the next level of pain for the aviation industry, which has been walloped by a rapid slowdown in air travel. Airbus is considering paring back the output of its A330neo wide-body, Bloomberg News reported this month. Airline shares have plunged as carriers including Lufthansa Group cut capacity on falling demand.

The travel slump together with restrictions on movements aimed at limiting the spread of the virus has led customers to defer taking possession of jets, the people said. Airbus saw no orders in February, though handed over 55 planes; its March figures could show a more significant impact, one of the people said.

Chinese airlines have postponed deliveries from Airbus factories in Germany and France, the people said, citing a travel ban and complicated quarantine procedures.

UBS analysts slashed their full-year delivery forecasts for both Airbus and Boeing on Monday, “given the prolonged and global context of Covid-19.” Airbus’s 2020 production will stay flat at 860 units, from a prior estimate of 906, analysts including Celine Fornaro wrote in the note.

The wide-body market was already showing signs of strain prior to the worsening spread of the novel coronavirus. At the end of January, Boeing confirmed that it would cut production of its marquee 787 Dreamliner to 10 a month from 2021, after Bloomberg earlier reported it was considering another output cut in response to sluggish demand for the model.