Airbus Balances Saudi Order Upside with Spanish Strike Risk as Investor Focus Shifts to Farnborough and Earnings

Airbus enters a pivotal stretch next week, juggling the prospect of a fresh order from Riyadh Air at the Farnborough Airshow with a simmering labour dispute in Spain and component shortages that threaten to pull the production machine off course. The stock edged up to €48.40 on Wednesday, trimming its year-to-date loss to 1.2%, as investors weighed the bull case of a bulging backlog against the bear case of operational friction.

Saudi state carrier Riyadh Air is weighing the conversion of options into firm orders for around six A350-1000 long-haul jets, according to industry sources, with an announcement possible during the airshow that runs from 20 to 24 July. The airline already holds 25 firm orders for the A350-1000 and options on 25 more, part of which could now be activated. Riyadh Air, which began scheduled flights only this month with seven 787s serving nine cities including Dubai and London, has also ordered 60 A321neo-family jets and is separately negotiating with Boeing for up to 30 additional 787 Dreamliners. The timing underscores the carrier’s aggressive fleet build-out, barely weeks into commercial operations.

The Farnborough gathering is shaping up as the largest in its 78-year history, with more than 1,400 exhibitors and over 100,000 visitors expected. Airbus arrives on the back of its best monthly delivery tally of the year: 89 aircraft in June. First-half deliveries reached 351 planes, a 15% increase year-on-year. The company’s internal target of more than 900 deliveries in 2026 sits above its official guidance of roughly 870. That gap between ambition and public forecast is one of the key uncertainties the market will scrutinise at a separate business update in London on 21 July, where management is expected to provide more detail on supply-chain conditions and delivery schedules.

Yet the delivery momentum faces tangible headwinds. In Spain, roughly 3,000 workers at the Getafe plant near Madrid — about a third of the site’s workforce — are striking until the end of July over deteriorating working conditions. The largest union among Spanish Airbus employees, Comisiones Obreras, has so far held back but has signalled it could call an indefinite walkout after 7 September if demands are not met. The industrial action hits the heart of Airbus’s narrowbody production, the A320neo family, which remains the backbone of the order book.

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Separately, spare-part bottlenecks are tightening. The aftermarket platform Locatory reported a 42% jump in searches for urgent maintenance parts in June from the prior month, while the industry’s bottleneck rate rose 3.5 percentage points. For Airbus, that translates into heightened competition for critical components needed to finish new aircraft. Customers such as IndiGo have already flagged delays on the A321XLR, highlighting persistent technical and regulatory hurdles.

The stock itself sits in a narrow technical range. At €48.40, it is 12% below the 12-month high of €55.00 touched in January and 26% above the March trough of €38.40. The 50-day moving average of €45.51 and the 200-day average of €47.20 both lie beneath the current price, and the relative strength index of 53.8 points to neutral territory — no clear overbought or oversold signal.

The next catalyst is the second-quarter earnings release on 29 July, where the market will zero in on whether management can reaffirm the 870-to-900 delivery target. A confident tone on both the Spanish labour dispute and parts availability could nudge the stock back toward the €55 mark. Conversely, any admission that component scarcity is materially slowing A320neo output would likely drag the shares toward the 100-day moving average of €44.13, a level that would set the tone for the medium-term trend.

Longer-term, Airbus is quietly building a second engine. On 14 July it signed a letter of intent to join the Bliksem-EXO consortium, a European effort to develop an interceptor for flight objects, with initial space tests planned for 2027. The defence and space arm, typically higher margin, could smooth out cyclical swings in commercial demand. But that is a story for later. For now, the immediate test is whether the company can deliver its aircraft plan without the wheels coming off — and whether a major Saudi order can provide a tailwind when the Farnborough doors open.