By Mauro Orru

Airbus said it would increase shareholder returns in the coming years, betting that strong demand for aircraft will continue to fuel growth.

The European plane maker said Wednesday that it was lifting its dividend payout ratio to between 30% and 50% from a current range of 30% to 40%. The company said special dividends and share buybacks remained on the table to return extra cash to shareholders.

The announcement came during the Paris Air Show trade event where Airbus secured several aircraft orders, underscoring strong demand for planes as airlines continue to expand capacity. LOT Polish Airlines ordered 20 A220-100 and 20 A220-300 narrow-body aircraft, while Saudi Arabia's Riyadh Air ordered 25 A350-1000 wide-body aircraft.

Airbus expects demand for more than 43,000 passenger and freighter aircraft between 2025 and 2044, saying it expects a higher proportion of deliveries to replace older, less fuel-efficient planes.

Still, the group remains in a difficult spot: Airbus has to navigate uncertainty from President Trump's tariffs, as well as supply-chain hurdles that have made it difficult to procure the parts it needs to assemble its planes.

The company backed its aircraft-delivery and financial targets for the year, which exclude any effects from tariffs. Chief Executive Guillaume Faury said in April that Airbus wouldn't cover the cost of tariffs for aircraft imported from its overseas factories into the U.S.

The group expects to deliver roughly 820 commercial aircraft to customers this year, more than the 766 planes it dispatched in 2024. The company had shipped 243 planes by the end of May, cautioning that the bulk of deliveries would be made later in the year due to supply-chain bottlenecks.

Airbus recently agreed to acquire some Spirit AeroSystems Holdings facilities that make parts for its jets in the U.S., Europe and Africa, moving to take direct control of production in a bid to stabilize supply chains after months of disruption. Faury previously said that challenges, in particular with Spirit, were putting pressure on plans to ramp up production of its A220 narrow-body and A350 wide-body aircraft.

The company said Wednesday that working with suppliers helped it to mitigate the effect of supply-chain snags. However, procuring engines and cabin equipment remained difficult, it said.

Airbus expects to produce 14 of its A220 aircraft a month in 2026 and 75 A320 narrow-body planes a month in 2027. It also expects around 4 A330 planes a month, though it didn't provide a date. For its bigger model, the company continues to target 12 A350s a month in 2028. Airbus has had to delay the entry of the A350 freighter variant into service to the second half of 2027 from 2026 previously.

Adjusted earnings before interest and taxes--Airbus's preferred measure of profitability--are expected at around 7 billion euros ($8.04 billion) this year, while free cash flow before customer financing--a metric closely watched by analysts and investors--is projected at around 4.5 billion euros.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

June 18, 2025 01:40 ET (05:40 GMT)

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