2

Free stories left to read

Airline Weekly subscribers get unlimited access to daily news and weekly issues.

Airbus Orders Plunge

Madhu Unnikrishnan
July 30th, 2020 at 12:52 PM EDT

Airbus aircraft at the Dubai Airshow

Airbus’s first-half 2019 results read almost like fantasy fiction now, after looking at the airframer’s first-half 2020 results. Then, Airbus was flying high on the strength of its A320 family, the uptake of the A220, and the growing popularity of the A350. And the Boeing 737 MAX grounding was beginning to have a positive effect on the Airbus order book. The company reported €31 billion ($36 billion) in revenue in the first half of last year.

That was then, and it’s a far cry from now. Airbus released its first-half 2020 results today, and the company reported a €1.6 billion loss in the half. But more startling was the order book. In the first quarter of this year, Airbus notched 290 orders for its aircraft. In the second quarter, just eight. It delivered 196 aircraft in the first half of this year, versus 389 aircraft in the same period of 2019. The backlog remains strong, though, with more than 7,500 aircraft in its backlog. But the company said it couldn’t deliver 145 aircraft in the first half of this year because of the Covid pandemic.

Airbus is slowing its production lines and has said it will reduce its headcount by 15,000 employees. Although Airbus does have a defense unit, the company doesn’t rely on its defense sales to buoy it during a commercial aircraft downturn in the same way Boeing does. Revenues at its Helicopters and Defense and Space units were down -2% and -9% respectively, compared with -48% for its commercial aircraft unit.

The chaos caused by the Covid pandemic shows no signs of letting up this year, CEO Guillaume Faury said. “We face a difficult situation with uncertainty ahead,” he said. The company is committing preserve cash through the end of the year.

There was a bit of good news for Airbus, though. A long-running saga finally has come to an end. For 16 years, lawyers from the European Union and the U.S. have been waging a war of paper in the World Trade Organization over launch aid for new aircraft programs. The U.S. claimed the governments of France and Spain gave Airbus illegal financial aid to launch the A350, a claim the EU has denied. With the threat of U.S. tariffs looming, Airbus has renegotiated the terms of the loans with the French and Spanish governments, bringing the aid in line with WTO rules.

Madhu Unnikrishnan
July 30th, 2020 at 12:52 PM EDT

Photo credit: Airbus aircraft at the Dubai Airshow Airbus

Up Next

1
Middle East

Emirates Earnings and Booming Brazil

In part one of this week's Airline Weekly Lounge Podcast, Gordon Smith and Jay Shabat discuss Emirates' record-breaking results and ask how long these good times can last. In part…
2
North America

Spirit Airlines and a Japanese Update

Gordon Smith and Jay Shabat explore two big topics in this week's episode. In part one, we examine what Spirit Airlines' Q1 numbers mean for the future direction of the…
3
Europe

Euro-Things

In this week's episode, Gordon Smith and Jay Shabat take a deep-dive into the latest earnings from carriers across the European continent. From airline supergroups to more niche Nordic players,…
4
North America

JetBlue and Volaris In Focus

With earnings season well underway, Gordon Smith and Jay Shabat examine the key trends and finer details from JetBlue and Volaris - two of the largest low-cost carriers in the…
5
North America

United’s Fascinating First Quarter

Fresh out of United's Q1 earnings call, Gordon Smith and Jay Shabat discuss the headline numbers and critical trends facing the U.S. carrier. Don't forget, you can find a full…

Special Offer: Choose From Quarterly or Annual Subscription Plans

2 of 3 free stories left to read

Already a subscriber? Login