Airbus shares jumped sharply on Wednesday after the European planemaker launched a €5 billion ($5.7 billion) share buyback and unveiled ‌new mid-term targets, including a near doubling of profits by 2029.

Handing investors a more bullish picture of the supply chain on the sidelines of the Farnborough Airshow, where delegates said the industry is turning a corner after parts shortages, Airbus increased its target for overall shareholder returns.

Its shares were up more than 6% ​in late trading.

The mid-term profit guidance seemed conservative to some analysts but plugged a gap called out by some shareholders.

"Airbus’ lack ​of longer-term guidance has long been a grievance with investors, and we think providing this forecast will ⁠help a lot in providing more assurance," said Vertical Research Partners analyst Rob Stallard.

Airbus is targeting a core profit of €12 billion ​to €13 billion in 2029, up sharply from €7.13 billion last year and well above a 2026 target of €7.5 billion.

Airbus is aiming to increase narrowbody ​jet production to 70 to 75 a month in 2027 from around 60 now but remains in talks over 2027 engine supplies from Pratt & Whitney. 

ROLLS SEES A350 DECISION SOON

It also sees strong demand for the wide-body A350 and reiterated it was studying a stretched version. But it declined to comment ​on the timing after the CEO of engine maker Rolls-Royce said Airbus could decide within 12 months.

Rolls-Royce CEO Tufan Erginbilgic said on ​Tuesday that Airbus was talking to airlines that were interested. "We are working with them," he told reporters.

Airbus Commercial CEO Lars Wagner said the company ‌aimed to ⁠decide this year on higher production for the A350, landing somewhere between the current goal of 12 a month and 20.

Airbus is also looking at stretching its smaller A220.

Airbus expects its main commercial aircraft business to generate around €10 billion in operating profit in 2029 and maintained a delivery target for 2026.

Asked whether he planned to seek a fourth stint as CEO when his mandate expires ​in 2028, Guillaume Faury did not ​rule out staying on to ⁠deliver on the new targets.

"I am fully available for the board to do what they think is appropriate for the company and enjoy what I'm doing," Faury said, adding that he was surrounded ​by a team of leaders.

"It's not about a one-man show. It's still about the team making ​it happen," he ⁠said.

The issue of appointments is sensitive at Airbus, which adopted market-friendly governance in 2013 after years of Franco-German power-sharing, but which continues to pay attention to the balance of nationalities.

Sources say that Airbus' decision to name longstanding board member Amparo Moraleda of Spain as its ⁠next chairperson, ​rather than making the expected choice of a French candidate to succeed Germany's ​Rene Obermann, had provided flexibility for Faury to stay on.

While there is no longer a strict rule, Airbus tends to avoid having two French or two German ​people in the top jobs.

Source: Reuters