Airbus Swings To Profit Amid Flurry Of Aircraft Deliveries
European planemaker Airbus has reported a first-quarter net income of €362 million ($439 million), giving the company its third profitable quarter in a row. It further secured 39 new aircraft orders in the quarter, 38 of which were narrowbodies. A positive cash flow position was solidified by 125 aircraft delivered, a higher number than was achieved in Q1 2020.
Deliveries continue for Airbus
The overall picture from Airbus results this morning is of a positive trend. The company swung to a profit of €362 million ($439 million), in contrast to a loss of €481 million ($522 million) in the same quarter last year. Deliveries were up over 2020, although the order book took a hit in terms of cancelations.
Deliveries were mainly on the narrowbody side, although some widebodies also made it out to customers. Of the 125 aircraft delivered in Q1, nine were A220s, 105 were A320 family jets, one was an A330 and an impressive 10 A350s arrived with airlines.
In a statement today, Guillaume Faury, CEO of Airbus, noted the factors that had contributed to its success in the quarter, saying,
“The good Q1 results mainly reflect our commercial aircraft delivery performance, cost and cash containment, progress with the restructuring plan as well as positive contributions from our helicopter and defence and space activities. The first quarter shows that the crisis is not yet over for our industry, and that the market remains uncertain.”
Uncertain appears to be the key word here, with the CEO noting that India, in particular, is an area that is concerning the planemaker. On a conference call today, Faury noted that,
“We have not yet seen a direct impact on us, but that’s probably one of the regions where we shouldn’t expect as good [an outlook] as was the case before. That’s why we have warned on the lack of linearity and unpredictability in the recovery on the short term.”
Faury noted that, in other regions, good results with vaccination programs continue to give the company reason to be optimistic. As such, Airbus foresees a need to ramp up production in the single-aisle market, particularly the A320 product line, and is maintaining its forecast of beginning this increase in rates in the third or fourth quarter of the year.
Orders secured, but a hit from cancelations
Despite the impact of the pandemic, Airbus secured 39 new commercial aircraft orders in the first quarter of the year. Unsurprisingly, 38 of those were in the single-aisle market. This contributed to the Airbus commercial aircraft arm achieving earnings before interest and tax of some €533 million, a step up from the €191 million figure in Q1 2020.
With the new orders taken into account, the order status for the company still stood at a negative. Overall, the situation is down 61 aircraft after cancellations, much of which was related to the removal of 88 aircraft for Norwegian in February. The backlog still stands at a healthy 6,998 aircraft as of the end of March 2021.
Overall, it’s a solid performance by the European planemaker in a challenging operating environment. Its commitment to cutting costs and favorable hedging strategy have put it in a good position to weather the year ahead, which is still predicted to be tricky.
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