AIR Stock Dips as Airbus Faces A320 Recall
As investors process the news of a major recall impacting its famous A320 jet, Airbus (AIR) shares have been moving sideways lately. The stock is currently down 5.35% from its annual peak, at roughly €204. Many investors are wondering if this recall will significantly impact Airbus’s stock price or if it will merely result in a short-term drop.
JetBlue Incident Sparks Major A320 Recall
More than 6,000 aircraft are part of the current A320 recall, which calls for a software update to fix a rare solar radiation mistake that may have an impact on flight control data. The issue came to light after a JetBlue jet experienced a brief pitch-down event. However, no passengers were harmed. Several airlines have reported that the impacted aircraft have been upgraded and put back into service, including Virgin Australia, American Airlines, Air India, and Jetstar. Such recalls have historically had a brief effect on major aerospace companies, particularly when operations soon resume.
Airbus Posts Strong Revenue Growth Despite A320 Recall
Airbus continues to have strong overall business indicators in spite of the recall. Its first nine months of 2024 showed a small fall in order intake by 20.7% to 514 and a marginal slip in its order book to 8,665. Revenue increased from €44.4 billion to €47.4 billion, mostly due to the commercial aircraft segment, which accounts for 70% of sales, despite a decline in defense and helicopter orders. Adjusted EBIT increased to €4.1 billion from €2.8 billion the year before due to expense cuts, particularly less money spent on R&D. With its 737, 777X, and 787 Dreamliner models, Boeing is reclaiming market share. Meanwhile, Airbus’s large backlog and continued orders from recent airshows give an attractive cushion for its fiscal health.
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[…] impacted part is a component of the core assembly of the A320. This has been essential to achieving 2025 production goals. Airbus has not disclosed the number of […]