Ladies and gentlemen, thank you for standing by. Welcome to the Airbus Nine Months 2026 Earnings Release Conference Call. I am Laura, the operator for this conference. Please note that for the duration of the presentation, all participants will be in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. At this time, I would like to turn the conference over to Jean-Christophe Henoux, Head of Investor Relations. Please go ahead.
Thank you, Laura, and a very warm welcome to everyone joining us today to dive into our nine-month 2026 results. I am in Amsterdam with our CEO, Guillaume Faury, and our CFO, Thomas Toepfer, and they are here to break down the numbers and take your questions. This call is planned to last one hour, including Q&A, and the replay plus transcript will be available on our website. Today's presentation and the detailed financial statements are already available on Airbus website. Before we start, let me remind you that we will be making some forward-looking statements. I encourage you to take a look at the safe harbor statement in our presentation slides. It is important stuff, so please have a quick read. With that, let us get things started. Guillaume, the floor is yours.
Thank you, JC, and hello, ladies and gentlemen. Hello, everyone. Thank you for joining us today for the nine-month 2026 earning call. Thomas and I, as said by JC, are here in Amsterdam to run you through our results. To begin, I want to express my most sincere sympathies to everyone affected by the devastating train accident in Spain earlier today. Our thoughts are with the victims, with their families, and also with the first responders who are managing the accident. It took place on the line connecting Madrid and Seville, two cities which are very close to our hearts here at Airbus. Moving forward, the global geopolitical and operating environment remains complex for Airbus and its customers who are navigating volatile jet fuel prices. Against this backdrop, we maintain our upward trajectory, driving forward our civil and military ramp-up to deliver on our strong backlog.
Looking to our divisions, defense momentum remains strong in Europe and globally. Our portfolio continues to prove its essential role in ensuring sovereignty and security. In our commercial business, we delivered 196 aircraft in Q3, bringing our year-to-date deliveries to 547, up from 507 over the same period last year. So 40 more. While achieving this, we are addressing two quality topics that I will detail later. Our delivery profile is again back-end loaded. As we speak, our teams are fully mobilized for a successful year-end rally. With this in mind, EBIT Adjusted stood at EUR 4.5 billion, and free cash flow before customer financing at minus EUR 1.3 billion. Our 2026 guidance remains unchanged. Now let us look at our commercial environment. Starting with Commercial Aircraft. Passenger traffic was largely resilient against the volatile backdrop, wh =ile air cargo maintains an upward trend.
We continue to closely monitor how the macroeconomic environment could impact air traffic and our customers. Our robust and diversified backlog supports our own company resilience. During nine months 2026, we booked 1,174 gross orders, of which 182 A220s, 830 for the A320 Family, and 67 A330s. On the A350, we booked 95 gross orders, including 34 A350 freighters, which underpins our strong widebody order momentum. Net orders amounted to 1,105 aircraft, including 69 cancellations, which were largely embedded in our backlog valuation at full year 2025. Our backlog in units stood at 9,310 aircraft at the end of September 2026. Let me highlight the growth we anticipate for the services market, as outlined in our latest global services forecast, which projects the market demand will double over the next 20 years. Airbus provides a full range of services across the aircraft life cycle, and we have strong ambitions there.
Looking at Helicopters, in the nine months, we booked 311 net orders, compared with 306 in the nine months of 2025. The order intake includes 10 UH-72B, the Lakota helicopters for the U.S. Army to modernize its fleet, and they are based on the widely successful H145. On the H225M, the government of Romania has signed a contract for the procurement of 12 Airbus military helicopters. This contract is the second one signed by Romania and Airbus Helicopters in the context of the European Union SAFE Initiative. Finally, we celebrated the official start of the series production of the H140 in Germany, excellent H140 helicopter with the first airframe successfully manufactured on the newly set up assembly line earlier this quarter. Overall, we continue to see good momentum in both the civil and military markets and remain fully focused on delivering on expectations.
Finally, on Defence and Space, we continue to observe very strong order dynamics for the division, with order intake standing at EUR 11.5 billion across all segments. EUR 11.5 billion in the nine months. That is very strong. in Q3, we secured strong wins in space systems, driven by the growing momentum towards European strategic autonomy. Notably, Airbus was selected by Eutelsat to build a further 229 OneWeb low Earth orbit satellites. Furthermore, we are pleased to see IRIS² moving forward as a European program, and we will support by producing platforms for at least 66 LEO satellites. Thomas will take you through our financials. Thomas?
Yes. Thank you very much, Guillaume, and hello, ladies and gentlemen. Welcome to the call. I am now on page 6 of the presentation, and I will be happy to take you through our financial performance. Let us start with the revenues that you can see on the left-hand side of the chart. As you can see, our nine months 2026 revenues increased to EUR 50.6 billion, which is up 7% year-on-year. That is mainly reflecting the higher commercial aircraft deliveries, as well as a higher contribution from our Defence and Space division. However, partially offset by the weaker U.S. dollar as compared to the nine months in 2025.
As you can see on the right-hand side of the chart, our R&D expenses continue to increase in line with expectation, notably to support the defense portfolio acceleration, and R&D amounted to EUR 2.3 billion as of at the end of September 2026. On to EBIT Adjusted on the next page. Our nine-month 2026 EBIT Adjusted increased 8% to EUR 4.5 billion, coming from EUR 4.1 billion in the nine months of 2025. It reflects the higher commercial aircraft deliveries, a strong performance in Defence and Space, again, partially offset by a less favorable hedge rate and the higher R&D expenses that I was already referring to. Now, coming to the EBIT adjustments, which stood at positive 55 million for the nine months of 2026, and you can see them on the right-hand side of the page.
These 55 million included positive EUR 270 million impact from the dollar working capital mismatch and balance sheet revaluation, mainly reflecting the mechanical impact coming from the difference between transaction date and delivery date, of which positive 146 million in Q3. Against that, a negative EUR 235 million related to the integration of the former Spirit AeroSystems work packages, of which negative 112 in Q3, and then positive again 60 million linked to the Airbus Defence and Space Workforce Adaptation Plan, unchanged since Q2. Last but not least, a negative 40 million of other costs, including M&A, of which positive 3 million in Q3. Now, this takes our nine-month 2026 EBIT reported to a positive EUR 4.6 billion.
The financial result, as you can see on the lower right-hand side of the page, was positive EUR 155 million, and it mainly reflects the revaluation of certain equity investments and the participations held in the venture capital funds managed by Airbus Ventures. These are partially offset by the revaluation of financial instruments and the evolution of the US dollar. The tax rate on the core business continues to be around 27%. The effective tax rate, however, is around 25%, including the non-taxable impact from the revaluation of certain financial investments, partially offset by the effect of the French surtax. For 2026, we expect the French surtax to be broadly in line with 2025, which, as you might recall, was roughly EUR 0.2 billion.
The resulting net income increased 36% to EUR 3.6 billion for the first nine months of the year, and that means earnings per share of EUR 4.54. Our nine months 2026 EPS Adjusted stood at EUR 4.26, based on an average of 790 million shares. Now let's turn the page and look at the US dollar exposure coverage. In the nine months of 2026, $17.1 billion of forwards matured with the associated EBIT impact and euro conversions realized at a blended rate of $1.20 versus $1.18 in the nine months of 2025. In the first nine months of 2026, we implemented $15.7 billion in new coverage over a five-year horizon with a mix of instruments including collars.
The blended rate of $1.21 for additions reflects in particular the less favorable rate of our collars, which are primarily weighted towards the outer year of our hedging period. As a result, our total USD coverage portfolio in USD stands at $74.4 billion, with an average blended rate of $1.22 as compared to $75.8 billion at a blended rate of 1.22 at the end of 2025. Now, onto a more detailed look at our free cash flow on the next page. Our free cash flow before customer financing was negative EUR 1.3 billion in the nine months of 2026. This outflow was mainly driven by the change in working capital. As you recall, this notably reflects the inventory built up linked to our back-end loaded delivery profile, as well as the planned ramp-up to support our businesses.
Our nine months 2026 CapEx was EUR 2.4 billion. To support our ramp-up in the successful integration of the former Spirit AeroSystems work packages, we expect our CapEx to continue to increase in 2026, as previously mentioned. So no change. The free cash flow was negative EUR 1.1 billion, including customer financing for positive EUR 0.2 billion. We continue to see a diverse and competitive financing landscape in the nine months of 2026. Currently, we expect sufficient liquidity to support our 2026 deliveries. Overall, and you can see it on the right-hand side of the page, our net cash position stood at EUR 7 billion as at the end of September, and that is also reflecting the dividend payment as well as the acquisition of Unical, slightly offset by the strengthening USD environment. Of course, our liquidity remains strong at around EUR 30 billion.
With that, I would like to hand it back to Guillaume.
Thanks, Thomas, and let us start with Commercial Aircraft. In the nine months 2026, we delivered 547 aircraft to 84 customers, an increase of 40 aircraft over the same period last year, including 68 A220s, 428 A320 Family aircraft, and 51 wide-bodies. We have no change in our targeted production rates, and we continue to drive the ramp-up. Our second A320 Family FALs in both the U.S. and China are now delivering, and we recently inaugurated a new delivery center in Toulouse, marking key milestones in the development of our global footprint. When it comes to the A350 freighter, I want to highlight again the successful completion of its maiden flight, which brings us one major step closer to delivering this game-changing aircraft for the air cargo market. This now marks the start of the flight test campaign, prior entry into service in the second half of 2027.
That's no change. For engines, the situation is also largely unchanged. For the A320 Family, the Pratt & Whitney engines remain the main so-called pacing item for the ramp-up. We anticipate we will get what we need to reach our 2026 objectives. On Spirit, almost a year after the acquisition of the former Spirit AeroSystems work packages, the integration remains challenging, but our teams are on it. I would like to also update you on two quality issues. First, on the A321, the surface protection deviation on a specific stringer was identified and is causing a short-term phasing impact in our operational flow. Sorry, on specific stringers, not just one, a series of stringers. The issue is contained, a remedy is available, and all newly coated stringers conform to requirements. We are delivering the relevant aircraft. It is not a safety issue, and the flying fleet continues to operate.
Another quality issue I would like to update you on impacts the A330. We have inspected all in-production aircraft following a finding in a horizontal tail plane. We took immediate action. We reinforced our controls, and all aircraft coming now out of production have been inspected and can be delivered. Overall, we continue to produce in line with the plan, and our commercial ramp-up continues. Now, let's look at the financials for Commercial Aircraft business. Revenues increased 8% year-on-year, mainly reflecting the higher deliveries, increased services, partially offset by the weaker US dollar. EBIT Adjusted increased to EUR 3.4 billion from EUR 3.3 billion in the nine months of 2025, driven by the higher deliveries, partially offset by higher R&D and less favorable hedge rates. Looking at Helicopters, in the nine months, we delivered 226 helicopters, eight more than in the nine months 2025.
Revenues were broadly stable at EUR 5.6 billion, and EBIT Adjusted stood at EUR 445 million, with both figures reflecting a less favorable deliveries. Let's complete our review with Defence and Space. Revenues increased 5% year-on-year to EUR 9.3 billion, driven by higher volumes across all business units. This volume, along with better overall profitability, resulted in an EBIT Adjusted of EUR 672 million. On R&D, the operational ramp-up continues at a gradual pace. The Q3 increase reflects, in part, a one-off catch-up effect. Now looking at our 2026 guidance, which is unchanged. The company assumes no additional disruptions to global trade or the world economy, air traffic, the supply chain, its internal operations, and ability to deliver products and services. The company's 2026 guidance is before M&A and includes the impact of currently applicable tariffs.
On that basis, the company targets to achieve in 2026 around 870 commercial aircraft deliveries, an EBIT Adjusted of around EUR 7.5 billion, and a free cash flow before customer financing of around EUR 4.5 billion. With that, and it's the last slide, we will conclude with our key priorities. Before handing over to you for the Q&A, let me summarize what is driving Team Airbus as we enter the final stretch of the year. Across our businesses, our focus is to deliver on the strong demand and expectations of our customers with safety and quality at the core of what we do. In this complex, and what I call a fast-changing environment, our priorities are clear. Our teams are fully mobilized to meet our objectives. I guess with that, Thomas and I are now ready to take your questions. For this, I will hand over to JC.
JC, the floor is yours.
Thank you, Guillaume, and thank you, Thomas. In order to allow an efficient Q&A session, let me set a couple of guidelines. First, please introduce yourself and your company before you dive in. Second, we ask you to limit yourself to two questions so that everyone can have a chance to ask a question. Finally, please try to keep a steady pace and speak clearly. With that, Laura, could you please explain the Q&A procedure for participants?
Thank you. We will now begin the question and answer session. If you want to ask a question, please press hashtag five on your telephone keypad. The first question is from Mr. Ross Law from Morgan Stanley. Please go ahead.
Hi. Good evening. Thanks very much for taking my questions. The first is on supply chain and where the current bottlenecks are. You mentioned engines are tracking broadly to plan, but on seats, Safran last week flagged a risk of delivery delays from the end of this year into 2027. So interested in whether this may impact your ability to meet this year's guide or whether this risk is already embedded in your planning assumptions. Then the second is on the buyback. You announced a EUR 5 billion buyback back in July with an ambition to start this in the second half. So it would be great to get your updated thoughts on timing of the launch here, given your confidence in full-year guidance and the fact the stock has pulled back since the summer. Thanks.
Yes. Thank you very much for the questions. I will take the first one and hand over to Thomas for the share buyback question. When it comes to the risks and the bottlenecks, they are indeed factored in the delivery guidance that we have confirmed. In the supply chain, we flagged the engines because they are indeed the pacing item, the one that creates the tension the most on the A320 Family. For the others, we continue to face challenging situation with the former Spirit AeroSystems work packages. You remember, and it is still the case, that the Section 15 for the A350 is on the critical path. Again, all of this is factored in the year-end outlook, and we feel we have what we need to continue to ramp up at the pace we have highlighted before towards the production rates given for the A220, A320, A330, and A350.
Nothing new on that front as we speak now. I think with this, I hand over to you for the share buyback question, Thomas.
Sure. As you said, we announced the share buyback during the air show this summer, and we said the ambition would be to start it in the second half of this year. I will not want to preempt any potential official announcement, of course, of the share buyback, but what I can tell you is nothing has changed in our view. The ambition is the same, and therefore, we see no reason to deviate from that. Again, I do not want to preempt and jump to anything which would sound like an official announcement. Stay tuned. Again, our ambition is unchanged.
Thank you.
Thank you. The next question comes from Benjamin Heelan of Bank of America. Please go ahead.
Yes. Good evening, guys. I hope you're all well. First question, Guillaume, you do sound more negative on Spirit. Has something happened? Can you give us a bit of an update there? Secondly, where are you on discussions with Pratt for engine deliveries next year? Thank you.
Well, hi, Ben. Thank you. We're good. I hope you're well as well. Well, actually, be it for Spirit or Pratt, there's no change in the situation. Spirit was and remains a difficult integration and quite complex. I don't know if I sound more negative than I was before. We knew when we entered into this acquisition that we were taking on challenging work packages. The Section 15 is on the critical path of the A350. That remains the case. Pratt, no change either. We continue to work with the same assumptions. There's nothing I can report in that call on other negative or positive. We think we have what we need for 2026, and the numbers have not changed for 2027. We continue to base our ramp-up assumptions on the same number of engines from the two engine manufacturers, including Pratt, for next year.
Basically, no change in the substance.
The next question is from Chloé Lemarié from Jefferies. Please go ahead.
Yes. Good evening, Guillaume, Thomas, and JC. Thank you for taking my question. The first one would be on the A321 and the stringer issue. It seems to still be sort of a pacing item there. Could you maybe share how many aircraft are currently held back by this issue? The second one would be on Project Bromo. Could you share update on the timeline from your perspective, any pacing item, and any of the proposed remedies submitted to the authorities? Thank you.
Thank you for the questions. I will leave the second one to Thomas. On the stringers, as I said, it is changing the timing and the speed of execution on the short term. It will not result in any non-delivered aircraft for that perspective, from the technical angle of it, in this year. That is the current expectation, and that is the best I can share with you. So, it is an operational difficulty that we are managing. This leads to additional work and will lead to additional constraints in the life of the aircraft that we are managing with customers. But for the 2026 deliveries, I do not expect any significant impact on the deliveries.
Yes. So, let me maybe comment on Bromo. So, I would say also no fundamental change here. So, let me remind you what is on our plate for 2026 and what is ahead of us into 2027. So for 2026, essentially, we have three major tasks to complete. One is the agreements with the, and the discussion with the antitrust authorities. They are constructive but have not yet been concluded. I will come back to it in a moment. Secondly, we have the negotiations with our social partners. Here, we have broadly concluded the negotiations, and so we are well on track on this front, which obviously we control largely ourselves. And number three, as we always said, 2026 will be characterized by some heavy work on carve-out specifically for Airbus, because the assets that we want to contribute into Bromo are spread across several legal entities.
So, there's quite a bit of carve-out work to be done that is also progressing according to plan. With that being said, what we do not fully control in terms of timing is obviously the antitrust process. As I said, it's constructive. We are replying to all the requests that we're getting out of Brussels, but it has not been concluded yet. Therefore, I would say our ambition is completely unchanged. We want to ideally come to a signing of a definitive agreement in 2026, and that would then be the condition for a closing of the transaction in 2027. But again, not everything is fully under our control, but we remain positive with respect to the transaction.
The next question comes from Sam Burgess from Goldman Sachs. Please go ahead.
Good afternoon, Guillaume, Thomas, and JC. Good to be on the call. The first question is just back to the stringer issue. Can I just confirm, is the rework being done post final assembly line and therefore maybe the way to think about it is it's causing some delivery delay, but it's not impacting the underlying production? Then just on Spirit integration costs, I think you've now booked around $235 million of one-off charges through nine months, as you mentioned earlier on the call, Thomas. But there's been quite a step up in that quarterly increase. Could you just give us your expectation for the full year cost here and maybe the trajectory of these one-off charges into 2027? Thanks.
Yeah. So for the stringers, when the issue has been identified, we had aircraft or we had component parts, MCAs in production. We had aircraft in the FAL, in the final assembly line process, and we had also aircraft being already delivered. I don't have the number of aircraft or items for each of the different categories, but basically it's not a safety issue for aircraft in service. So, this has to be managed through the way the maintenance will be carried out moving forward, and there's work ongoing and discussion with customers on how to deal with this. I don't think it's very critical, but it needs to be managed. For aircraft which are in the production process at different stages of production, we are correcting the topic, and aircraft continue to be delivered. It takes time.
It has had a short-term impact as we had to understand the situation, to do the investigation, to understand the criticality, and then find the appropriate measures. As I said earlier, we took the appropriate measures. We correct the situation, and aircraft will be delivered. When it comes to the full year of 2026 deliveries, we do not expect impact on the deliveries or at least not that I know, and in any case, not significant impact.
Let me maybe take the one on Spirit. Key message is, of course, the integration remains a challenge, but nothing fundamentally new, and that means also our financial view of the transaction is unchanged. Let me just reiterate how we look at things. We are expecting a low triple-digit EBIT effect in 2026. I would say what you see after nine months is in line with that trajectory. We also said the cash effect would be significantly higher and would be a high triple-digit effect in 2026. Why is that? Because on top of the integration cost, of course, we are building up working capital in order to smoothen the production flow, and we have to make some investments in order to prepare Spirit for the ramp-up, specifically for the A350.
Also for this number, I would say we are on track and therefore no news with respect to our financial projections with respect to Spirit.
The next question comes from Ian Douglas-Pennant, from UBS. Please go ahead.
Hi. Thank you. Yes, it is Ian Douglas-Pennant at UBS. Maybe you could help us think about 2026. What are the headwinds that you expect to see in Q4 means that EBIT is going to be roughly flat year-over-year this year, which is what your guidance implies when deliveries will be up year-over-year, as implied by your delivery guidance. Secondly, understood that engines are a pacing item today, and it seems likely, given your commentary before, that that will continue at least through most of 2027. Please correct me if that is wrong. But thereafter, it seems likely to me at least, engines will not be a pacing item. If not, you will have a surplus of engines. Do you need to increase your inventory levels in 2027 to be ready for that moment so that you can increase productions rapidly thereafter?
Is that not the right way to think about it? Thank you.
Maybe I will take the second question first and hand over to Thomas. Engines will continue to be the pacing item indeed for 2027. I mean, the sum of Pratt & Whitney and CFM engines. There is no change compared to the assumptions we have taken previously and consistently with the business outlook we gave at the Farnborough Airshow, so there is no change in the assumptions. But indeed, the delivery profile for 2026 and 2027 has been built with the engine delivery profile given by Pratt beginning of this year. So, there is no change on the fact that would we get more engines or we would have a commitment for more engines, we would prepare for more aircraft delivery, but we have adapted the number of aircraft we produced to the number of engines we expect to get.
In other words, we are not building, and we will not be building in 2027, additional inventories and so-called gliders, assuming we would then get many more engines in 2028. We have adapted the profile to the number of engines we have finally understood we would get from, especially Pratt & Whitney, but also CFM. I hope that clarifies the plan. We produce according to the number of engines we expect to get.
Maybe let me take the one on the remain to do for the last three months of the year. To put it into perspective, last year, our EBIT Adjusted in Q4 was EUR 3 billion. What are the changes that we're expecting in Q4 of 2026 relative to 2025? Obviously, the most important one is the uplift of our deliveries. If you take the midpoint of the guidance, so 870 deliveries, that means 37 more aircraft in Q4. However, I would caution you a little bit. Those 37 aircraft contain a slightly higher proportion of A220s relative to the uplift that we had in the first nine months. So not all of the 37 carry the full margin.
Make a deduction of, I would say, a small double-digit number in absolute, and then you multiply with the usual EUR 15 million, and that brings you to roughly the right amount that you should put into your model in terms of the volume and efficiency uplift that we have in Q4. Then you asked specifically what are the headwinds that we have. I think we already touched on the topic of Spirit. So, Spirit would be one thing that is a headwind in the order of magnitude that I indicated for Q4. Secondly, R&D is also slightly back and loaded. You've seen that in Q3, R&D accelerated. We're absolutely on the trajectory that we have foreseen for R&D, but that means also a slight step up in Q4. Finally, you've seen that we also recruited some people, so it's a minor effect.
But if you take those three together, that brings you to the uplift for commercial. Last but not least, for the other two divisions, so Airbus Helicopters and Airbus Defence and Space, if you take them together, I would not put in a big uplift so you can take them as broadly stable or a slight uplift. With all that together, we feel that we are on the right trajectory, not only for the deliveries, but also for the corresponding financials.
The next question comes from Milène Kerner from Barclays. Please go ahead.
Yes. Thank you. [Non-English content], Guillaume, Thomas, and Jean-Christophe. Milène Kerner from Barclays. I have a first question on the A320 Family. Outside of the engine, I found that you sound more confident ramp-up today. What has specifically improved over the last few months to drive the change of your tone, Guillaume? The second question is for Thomas on the inventory. Looking across the A220, A350, A320 Family, where do you carry the most excess inventory, and what would it take to remove it without increasing delivery risk? Thank you.
[Non-English content] , Milène. What drives my, I do not know if it is a more optimistic tone or a more positive tone on the supply chain, is that basically the general state of the supply chain in supporting the ramp-up of the A320 mainly, is indeed improved compared to previous years. That is not inconsistent with what we have said already. Still, we are limited by engines. That is the pacing item. We have been discussing this already earlier in this call. As there is no change on the perspective of number of engines, we continue to be on the same trajectory that supports the confidence we have for the ramp-up and confirming the outlook for this year, also on the 320. Yes, it took years to get to that point to have the recovery of the supply chain.
We are not yet there everywhere, and we have other difficulties and seats were mentioned earlier. Interiors in general are a bit of a challenge. You know that we are suffering in the ramp-up on the A350 because of the Section 15 of the A350 and therefore the acquisition of Spirit AeroSystems and what I commented on already earlier on the call. A220 is going through a very steep ramp-up, quite satisfied with the outcome, and we are on trajectory. An overall better situation in the supply chain, but still a large number of topics where we are working to iron out challenges. What remains on watch is the quality. We need a better quality environment to be more regular, to be more predictable. I commented on two quality issues earlier around the call. One that is an internal and self-generated topic with an FOD on the A330.
The other one being on the stringers, highlighting the challenges of transfer of work and managing a supply chain with the perspective of increasing the resilience in this complex environment. We are active and we are moving things, but it comes with some challenges. Overall, we feel comfortable with the ramp-up. As you see, we are confirming the outlook for this year. We were comfortable enough at the Farnborough Airshow to give a 2029 midterm target. It is supported by the view we have, the confidence we have in the ability of the supply chain to serve us and support us in this ramp-up. The previous question?
With respect to inventory, Milène , let me try to characterize it in the right way. As you've seen from our balance sheet, we have built up roughly EUR 10 billion of inventory, if you compare the nine-month point with EUR 51 billion relative to the starting point of the year EUR 41 billion. I would not call it excess inventory. I would say relative to the situation that we're in, which is a steep ramp-up, this is the inventory that we would like to have and which we think makes sense to have, because we don't want to create additional bottlenecks internally because we are scrutinizing too much the inventory. I think the positive message is we have what we need to have in our production lines to manage the steep ramp-up that we have ahead of us in Q4.
But of course, this inventory level is not the right level if you look at it from a steady state perspective. I would clearly say that once we are at a stable rate, 75 for the A320, there should be potential to reduce inventory and squeeze out some cash. But that is not yet the case. We have to be stable at that rate for a certain while, and now I'm not going to be too detailed with respect to your question, but of course, the biggest potential in terms of eventual inventory reduction is for the programs where we have the steepest ramp-up, and that is clearly the A320, and to some smaller degree in absolute terms, the A350. But again, currently, our view is this is the inventory level that we should have and the potential then comes later once we're at a stable state.
The next question comes from David Perry, from JP Morgan. Please go ahead.
Yeah. Hi, good evening, Guillaume, Thomas, and JC. Two questions, please. First one is, we've had a nice move in the dollar. I know it comes and goes, but if I just tapped in today's dollar rate into my model, it would throw out for me an EBIT number above your EUR 12 billion to 13 billion range in 2029. That might be because my model doesn't work, I don't know. But is there any reason why you're hard capped at the EUR 13 billion? Are there any negatives that might offset a better FX rate? That's the first question. The second one, and I'm sorry to be a bit pedantic and come back on the stringers. Just a clarification. You said, Guillaume, it won't impact deliveries this year. You always say your delivery guidance is plus or minus 20.
I just wondered, does the stringer issue take you to the lower end of 850 to 890? Also you very specifically said it wouldn't impact deliveries this year. Just wondered, does it have any potential impact on 2027? Thank you.
Yeah, I start with the latter and leave a bit of time to Thomas to also.
I'm ready. Go ahead.
Try . No, it will not have an impact on 2026, or no significant impact. Very minor, if any, and I'm not suggesting it will take from midpoint to low point. Generally speaking, we are happy to have this ±20 as there are uncertainties in our ability to deliver and what will really come out of the FALs by 31 December. But as you have understood, I think we feel reasonably comfortable to be somewhere in the 870 ±20 with what we see and what we have today. No, don't take this as a trick. There's no trick behind, and there's no trick for 2027 either. We don't intend to have this impacting 2027. So, don't take the stringer quality issue as something having a similar impact of what we had with the panel last year.
It's of a completely different nature and completely different type of impact on the product and on the deliveries, meaning much smaller, easier to manage, less impactful for customers and not changing the view we have on 2026 deliveries and 2027 deliveries either.
With respect to the 2029 midterm guidance, as we don't have a crystal ball where the dollar will be in 2029 and how it will evolve in the meantime, what we have said, David, is we take an assumption of a dollar rate of 1.22 for 2029. That gives you the flexibility to put it as an input factor in your model. We also, in the summer, gave you the flexibility that with each cent, the variance is roughly $250 million in the model. Why did we do it this way? Simply because we don't have the visibility. Where does the 1.22 come from?
It might sound conservative from today's perspective, but when we put those numbers together before the summer, the assumption was, if we had hedged the entire exposure of 2029 with forward, that would have roughly been the rate that would have led to 1.22. You can say it's a theoretical exercise, and the reality will look different, and I would agree to that. But we simply had to take an assumption, and then I think that gives you the input factors that you can put into your model, and I have full confidence that your model works perfectly. I think with that, you have the ingredients that you need.
The next question come from Doug Harned from Bernstein. Please go ahead.
Thank you. Two questions. First, I would like to go back to Spirit. If we think back to pre-COVID, Spirit was producing Section 15 at a 10-a-month rate. They were actually doing it. They said it was cash positive. Now that everything has gone through all these transitions, can you talk about what is wrong today in terms of labor, supply chain, anything that has led to the much more difficult Spirit and how you are addressing it? The second question is, can you comment on the status of the new planned variants, the A220-500, A350-2000, and specifically, any update you can give us on engine choice there?
Starting with the latter. I think a lot has been said on this. I do not know where to start to make a reasonably short answer. We have two programs where we are looking at potential stretch versions. One is the A220, the 500 being the potential stretch version and the A350-2000, or whatever you call it, being a potential stretch version of the A350. We are working towards a potential decision, which does not mean that there will be a positive decision. We are looking at the opportunity and what the product would look like, checking with partners and suppliers that we would have the ability to do the program, that there is a business case that makes sense, engaging with customers on what the product would look like, what it would mean for them.
We are in the phase of analysis prelaunch and not suggesting that the launch decision has been taken. It is not the case. Still, we are looking at the opportunity. When it comes to engines, I do not want to be specific. Engine makers, engine partners are important partners we are speaking with to make the decision. Obviously, the choice of engine drives a lot of assumptions and has a lot of implications on what the business case looks like, what the aircraft looks like, what the performance of the aircraft looks like. It is an important piece of what we are looking at. That is basically it. I think we are also looking at potential additional ramp-up on the A350.
That is something that Lars Wagner has been quite specific on as we see a very strong demand for the A350 Family, and we think there is potentially an opportunity to look at further increasing the rates beyond the rate 12 that we are working towards at the moment. That is maybe the opportunity to go to Spirit. Why was it what it was before COVID? Going through COVID, a lot of companies have made very significant decisions to scale down their operations, to reduce their cost base, and that has come with a lot of midterm and long-term consequences. We have a large number of suppliers who had to rebuild very significant part of their operations as they moved out of COVID, having survived the crisis.
Spirit is a company that was not only serving Airbus, they were serving mostly our dear competitor, Boeing, when this competitor was going through difficult times, especially on the one program that was making Spirit mostly making money. They have suffered big time in this time, and we have, both of us, our competitor and ourselves, been facing the situation of a company that was in a very difficult place as we were starting to ramp up. You know what has happened in the meantime with the decision from Boeing, and therefore afterwards of Airbus, to do the acquisition for us certain work packages, and for Boeing, a large part of the company. We have done this at a time where what we found and what we have to repair or what we have to do is very significant.
It is mostly coming from the history of the company, from what has happened between 2018, 2019, and where we are today. Indeed, it is a difficult work to do the ramp up. Having in mind that we have gone through the up and downs of the program. We were indeed close to rate 10 before COVID, not more, and we went down to rate four, actually below rate 4 for some months or some quarters, then stabilizing at rate 4, and we are now targeting rate 12. As you can imagine, it is a significant effort to put the production system back on track with the right level of speed, of quality for the A350. I guess your question was mostly on the A350, so I try to do my best answering your detailed question on those two points. Laura will go through the final question, please.
The last question comes from Ken Herbert from RBC Capital Markets. Please go ahead.
Yes, hi. Good afternoon or good evening. Appreciate taking the question. If I could, just two final questions. The first, really strong bookings, the trend continuing through the third and obviously nine months straight in the defense business. Can you talk about expectations for continued strengths in defense bookings into the fourth quarter and into 2027, and how we think or how we should model the conversion of the bookings to the revenue growth, and could we be seeing maybe better revenue growth in the defense business than what you have previously been communicating? Second, on the A321XLR, there has been a fair amount written on the extra weight on that program to accommodate the fuel tank. Can you talk about momentum on that program and if we should start to see maybe an upturn in orders on the A321XLR? Thank you.
Let me maybe start with the first one. Yes, I would agree with you. We are happy and pleased with the order intake that we see for the first nine months of the year. That is a 70% uplift. I think maybe more importantly, the message is the order momentum we see is very sustained and we as Airbus in our Defence and Space division, we are taking advantage of this momentum. The customers trust us. They want us to play a big role when it comes to European sovereignty. I think all that is reflected in this order intake. It is a little difficult to make a prediction for Q4 because order intake and defense can be lumpy, and we are talking sometimes big orders and it is difficult to, let us say, project or promise what exactly will happen in Q4.
I would not exclude indeed, that we are moving into another, or that 2026 will be another real record year for Defence and Space. Remember, we had a record year in terms of order intake in 2025, and that was beating the record of 2024. That shows we are really on a good trajectory, and I think the overall message is we are confident that the momentum will continue irrespective of what the exact number in Q4 will be. I think that also shows that ADS has potential to increase the margin. That is what we are expecting, but I will certainly not give any new guidance with respect to their EBIT trajectory. I would say we are confident that they are on a good track to achieve the around $1.3 billion that we have modeled into the overall guidance for 2029.
I would say the environment that we are currently seeing is clearly supporting that.
When it comes to the XLR, I have not looked at the recent percentage of A320 Family aircraft, which are XLRs. What I can tell you is that the percentage, the share going to the A321 is very high. It is getting higher, and the vast majority of the backlog is now on the A321. I think we have around 500 XLRs in the backlog. I am looking at the team to see if they can get the exact figure, but that is the order of magnitude. We continue to see interesting momentum for the product. Indeed, there is positive feedback from customers on the product, on the use of the XLR. It works really well. Long-distance flights on the A321XLR really feels good from a passenger experience perspective. That is something that pleases very much the airlines, airline customers.
The economics of the XLR on such type of routes is coming back to us as something very efficient. I think we will see a continued success and momentum on the XLR, but being one share of the A321 Family, we take it as part of the A321 Family. We also have the LR, we have the regular A321s. That is a family of products, not mentioning the A320 as well, that makes sense as a whole. But this latest member of the family is performing well, and we expect will continue to perform well.
Thank you, Guillaume and Thomas, and thank you, everyone. We really appreciate you taking the time to join us today. Before we close, let me end with a personal note regarding Olivier Prebay, who is in the room with us, because today this is his last disclosure. You all know him and obviously appreciate him. He has been award-winning interface to the market for several years at Airbus. So thank you, Olivier, for your outstanding contribution and amazing support to Investor Relations in the last years. As you prepare for your next challenge, still at Airbus, know that you leave with our deepest gratitude and warmest wishes.
Thank you, Olivier.
As usual, if you have any further questions, please do not hesitate to reach out. Just drop an email to Victoria, to Olivier for a few weeks, or myself, and we will get back to you as quickly as we can. That brings our session to a close for today. Have a great evening, everybody.
Thank you very much. Bye.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant evening. Goodbye.