Undelivered Airbus jets jam parking spaces, hurt cash flow

Tue Apr 19, 2016 2:19pm EDT
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By Tim Hepher and Regis Duvignau

PARIS (Reuters) - A growing backlog of undelivered Airbus passenger jets, stranded outside their factories due to supplier problems, is putting pressure on the planemaker's cash generation for the start of the year, industry sources and analysts said.

After a slow first quarter in deliveries, parking space at Toulouse airport in France, and at Hamburg in Germany, is increasingly congested due to undelivered jets, according to industry sources and recent Reuters photographs.

The number of A320neo passenger jets standing without engines and waiting for delivery, due to technical problems and delays at engine maker Pratt & Whitney, has risen to more than two dozen, two industry sources said.

After taking into account price discounts and deposits already received, that could tie up around one billion euros ($1.14 billion) in cash, a senior aviation finance source said, asking not to be identified.

Airbus A350 deliveries also continue to be delayed due to shortages of cabin equipment, the sources said. Reuters observed at least six parked A350s apparently waiting for delivery in Toulouse. One industry analyst, asking not to be named, said the figure could be higher based on a study of jet serial numbers.

Airbus declined to comment on specific airplanes but said it remained confident of meeting its published delivery targets.

Analysts said underlying output on the company's assembly lines did not appear to be disrupted.

Deliveries of the A350, which competes with the Boeing 787, are being hampered by continued production bottlenecks in cabin equipment including seats and toilets, adding further pressure to the planemaker's quarterly cash position, the sources said.   Continued...

Undelivered Airbus A350 aircraft seen parked at Toulouse Airport, Southwestern France, April 15, 2016. Picture taken April 15, 2016.  REUTERS/Regis Duvignau