Airbus Shares Plunge 9% Amid New A320 Quality Issue Reports; Delivery Delays Feared After Recent Software Glitch

Airbus Shares Plummet Amid New A320 Quality Concern

Shares of Airbus, the formidable European aerospace giant, experienced a significant downturn on Monday, with prices falling more than 9%. This sharp decline, the most substantial daily drop since June of the previous year according to LSEG data, was triggered by alarming reports of a newly identified industrial quality issue concerning dozens of its widely used A320-family aircraft.

Fuselage Flaw & Delivery Delays

The core of the problem lies in a flaw said to affect the aircraft's fuselage panels. While this manufacturing defect is reportedly causing delays in some aircraft deliveries, reassuringly, there are no immediate indications that any A320s currently in service have been impacted. Reuters, citing unnamed sources, was among the first to report on the issue. Airbus was not immediately available for comment when CNBC reached out.

Market Reaction and Broader Context

The news sent shockwaves through the market, with Airbus's Paris-listed shares tumbling to the bottom of the pan-European Stoxx 600 index. The stock was last observed down 9.5%, underscoring the severity of investor reaction to the quality concerns.

This latest revelation comes on the heels of another significant disruption for Airbus. Just over the past weekend, the company dealt with a widespread software glitch that affected the vast majority of approximately 6,000 A320-family aircraft. This incident necessitated crucial modifications and compelled airlines globally to ground jets during one of the year's busiest travel weekends. The directive, one of the largest in Airbus's 55-year history, significantly impacted U.S. holiday travel and extended as far as Australia, hitting particularly hard in Asia where the single-aisle A320 family anchors critical short-haul networks.

Addressing Recent Challenges

In a statement published on Monday, Airbus had already apologized for the extensive delays caused to passengers and airlines by the software issue, which had impacted more than half of the narrow-body fleet. The aerospace leader is now faced with the dual challenge of rectifying a manufacturing quality issue while also ensuring the smooth rollout of modifications for the recent software problem.