At the halfway mark of 2019, Airbus’ profits climbed high. The European aerospace giant ramped up the production rate of its most popular jet, increased total delivery numbers and saw a snowballing demand of its newest products.
Airbus revenues increased to €30.9 billion (H1 2018 – €24.9 billion); while reported EBIT (earnings before interest and taxes) were also up from €1.1 billion in H1 2018 to €2 billion in H1 2019. Airbus aims to achieve 15% more earnings compared to 2018 as the year ends.
The company lost €436 million in earnings due to suspended weapon exports to Saudi Arabia, A380 program losses and “other costs”.
Total deliveries have increased, as Airbus managed to transfer 389 aircraft to customers, compared to the H1 2018 result of 303 aircraft. The manufacturer expects to deliver a total of 880-890 jets by December 31, 2019.
H1 was not an easy ride for Airbus. The company had to announce that they are canceling A380 production, A321 deliveries had to be delayed several times and airlines have shown limited interest in firm orders compared to 2018: 213 in H1 2019, 261 in H1 2018. Its Defence and Space division is struggling as well and management changes have been announced within the division.
Nevertheless, Airbus further strengthened its positions in the fastest-growing commercial aviation sector – the single-aisle jet market, as the company made two every important announcement regarding its product lineup in May and at the Paris Air Show.
Increasing range
Firstly, during the Airbus Innovation days 2019, the multinational manufacturer announced the increased MTOW and subsequently, the range of the Airbus A220. The A220-100 and the A220-300 will now be able to travel 450 nm and 150 nm further, respectively. Airlines will be able to upgrade their A220 jets starting from H2 in 2020.
The Paris Air Show was a huge success for Airbus, as airlines signed orders for 85 Airbus A220 jets during the festivities at Le Bourget.
Furthermore, Airbus announced one more aircraft with an increased range – the A321XLR, which will offer 15% more range compared to the previous extra-mile aircraft, the A321LR. Airbus achieved the extra range by adding a new fuel tank at the rear of the aircraft, modifying the landing gear and the wing trailing-edge flaps.
Airbus plans to begin deliveries in 2023. The company won 226 orders for the XLR, including 99 conversions from the A321neo.
In total, the trip from Toulouse to Le Bourget resulted in 363 commercial aircraft: 149 firm orders and 214 intentions to purchase the aircraft, with further 352 order conversions.
Deliveries up; delays follow
The company has steadily increased its output according to the increasing demand for its most popular jet, the A320. Airbus aims to achieve 60 aircraft per month rate by mid-2019. As a result of the ramp-up, Airbus delivered significantly more jets than in H1 2018, including 294 A320 family aircraft.
However, several airlines have noted that their A321 deliveries were late – on July 15, 2019, Wizz Air announced schedule changes in Kyiv for the month of August “due to operational reasons caused by aircraft delivery delays”.
JetBlue CEO Robin Hayes has also noted that “Airbus has recently communicated additional A321neo delays that will reduce our 2020 growth plans […]”.
Back in April, Kuwait Airways announced that Airbus has delayed deliveries of the A321neo for several months.
Kuwait Airways would like to inform its customers that due to the delay of delivery of some of it’s new Airbus A320-Neo aircraft by the manufacturer for several months.
Kuwait Airways may be required to temporarily cancel some of our current flights and merge other flights -1
— Kuwait Airways (@KuwaitAirways) April 2, 2019
Airbus states that “ramp-up in production of the Airbus Cabin Flex (ACF) version of the A321 remains challenging”.
Airbus wide-body aircraft production is showing healthy signs of progress.
The company is slowly preparing for increased A330neo output rates, as it scales back the A330ceo production and the A350 program “is on track to reach the breakeven target for the year”.
But Valentine’s Day was bittersweet for every aviation enthusiast, as Airbus officially announced that it will not take up new orders for the A380 and will cease production in 2021.
The program that had produced a fair share of losses for the manufacturer, hit the financial results in H1 2019 as well – Airbus reports that the A380 program resulted in €136 million of losses.
Executive changes
In addition, the German government’s ban on weapon exports to Saudi Arabia has cost the company €208 million. The ban has reflected in Airbus Defence and Space division finances, as it reported an EBIT loss of €15 million, compared to the H1 2018 profit of €382 million.
Subsequently, Airbus has announced significant management changes – Julian Whitehead, effective October 1, 2019, will become the Executive Vice-President Global Business and Strategic Programmes, a step-up from his previous role as Executive Vice-President Finance of Airbus Defense and Space division.
Xavier Tardy will succeed Whitehead as Executive Vice-President Finance and will also join the division’s Executive Committee.
Dirk Hoke, CEO of Airbus’ Defence and Space, reflected on the change in the press release:
“Julian’s appointment underscores our strong commitment towards performance improvement, which is a top priority. We’ve substantially improved our operations and project execution but we are convinced we can – and have to – achieve even better results going forward with upcoming opportunities like the Future Combat Air System and Eurodrone programmes”.