Airbus
Note: This is a daily stock update and the information stands true as of 01/12/25, 09:00 CET.
Company Update:
Expert Opinion:
While the consequences of the issue are likely to be less than initially feared, Airbus will likely have to pay some compensation to airlines for these issues. There is also a potential perception risk even though their decision to immediately apply a correction highlights the importance of safety nowadays and may actually reinforce the perception of Airbus as the safer company. Should Airbus shares take a substantial hit, our expert would take this as an opportunity to buy more. He sees Airbus as one of the few safe, very attractive long-term growth stocks in our universe (duopoly with Comac not still a real competitor even though that will come, structural demand in excess of supply, leadership position...). This could also be a negative for Thales, which manufactures the hardware. Yet they were quick to announce this was a software issue which was fully Airbus's responsibility.
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Company Update:
On Friday, Airbus announced its A320 family needed immediate grounding to fix an issue with flight control hardware/ software. Initially, Airbus said the grounding would affect 6000 planes. For most, a simple software update corrected the issue, and repairs took less than 3 hours per jet. For older versions, there is a need to change the hardware which will imply more delays. However, this is expected to be a minority. The disruption over the weekend was actually minimal, and several airlines have already applied the corrective patch. Airbus now says that the vast majority of 6000 jets were already modified. On Friday after market, Airbus shares were down c 6%.
While the consequences of the issue are likely to be less than initially feared, Airbus will likely have to pay some compensation to airlines for these issues. There is also a potential perception risk even though their decision to immediately apply a correction highlights the importance of safety nowadays and may actually reinforce the perception of Airbus as the safer company. Should Airbus shares take a substantial hit, our expert would take this as an opportunity to buy more. He sees Airbus as one of the few safe, very attractive long-term growth stocks in our universe (duopoly with Comac not still a real competitor even though that will come, structural demand in excess of supply, leadership position...). This could also be a negative for Thales, which manufactures the hardware. Yet they were quick to announce this was a software issue which was fully Airbus's responsibility.
For daily updates, subscribe to our newsletter and for detailed information, reach out to us at sales@alphavalue.eu
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