Aircraft builder
At Airbus, the signs point to more profit
The European aircraft manufacturer Airbus is becoming more optimistic after surprisingly good deals in the summer. Photo: Ben Birchall / PA Wire / dpa
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Tensions in the supply chains and sales difficulties due to the pandemic are making life difficult for aircraft manufacturers. Nevertheless, the manufacturer Airbus can announce good news to its investors.
The European aircraft manufacturer Airbus is becoming more optimistic after surprisingly good deals in the summer. The company raised its forecast again on Thursday.
The operating profit before interest and taxes adjusted for special effects should reach around 4.5 billion euros – half a billion more than announced in the summer. Like many other companies, the manufacturer feels tensions in its supply chains. Nevertheless, CEO Guillaume Faury was confident of delivering around 600 commercial aircraft this year as planned. The news was well received on the stock exchange: Airbus shares rose in the morning.
It is true that Airbus achieved sales of 10.5 billion euros in the third quarter, six percent less than in the summer of 2020, which was already characterized by pandemics. The adjusted operating profit even plummeted by 19 percent to 666 million euros.
Nevertheless, after the first nine months, an adjusted operating profit of just under 3.4 billion euros was posted across the group. This means that 1.1 billion are still missing to reach the new target of 4.5 billion this year. The bottom line was that Airbus earned 2.6 billion euros in the months from January to September, after the group had fallen into the red a year earlier due to depreciation and provisions for the reduction of thousands of jobs with 2.7 billion euros.
Production increases planned
Now the manufacturer is preparing to increase its aircraft production, which it had throttled because of the Corona crisis. They are working «intensively on ensuring the right industrial capacities and the ability of the supply chain to deliver,» said Faury. While Airbus plans to deliver around 600 aircraft this year, it was 863 in 2019.
The planned increases in production are primarily about the medium-haul jets from the A320 family, including the new A320neo. Their production is expected to rise to a record 65 copies per month by summer 2023. During the crisis, Airbus only built around 40 A320 Family jets a month. In the case of the large long-haul jets, the recovery is progressing much more slowly, especially since air traffic on the intercontinental routes is still suffering severely from the restrictions caused by the pandemic.
While production of the established model series is still far from pre-crisis levels, the group is preparing a cargo version of the A350 to compete with its rival Boeing in this area as well. The US group has been in a crisis for a long time: After the debacle surrounding the medium-haul Boeing 737 Max, the manufacturers are now facing stubborn problems with the long-haul 787 “Dreamliner”. In the third quarter, Boeing fell back into the red.