Airbus Updates No.3486

 Fiji Airways Sends Two Airbus A330s Back To Its Lessors

Fiji Airways is losing a third of its Airbus A330 fleet as it returns two A330-200 aircraft back to lessors. The airline has been working to reduce its costs amid the global health crisis and persistent travel restrictions, and suppressed demand. The aircraft will fly back to Abu Dhabi and their lessor, Etihad Airways.

The two jets were helpful in providing capacity during the 737 MAX crisis. Photo: Laurent Errera via Wikimedia Commons 

The two jets leaving Fiji Airways

Made possible due to the short-term nature of the original lease agreement, Fiji Airways is in the process of sending back two of its Airbus A330-200s. The early return is due to the prolonged health crisis and suppressed travel demand.

The two 15-year-old jets are named “Island of Beqa” (registered DQ-FJO) and “Island of Vatulele” (registered DQ-FJP). This move, according to Fiji Village, is a few months ahead of the original end of the lease.

Fiji Village also notes that the airline’s Managing Director and CEO, Andre Viljoen, notes that the aircraft were first acquired to boost capacity in the short term and allow for an increase in frequency, as well as the launch of new routes (such as to Tokyo). Viljoen also noted that the aircraft played a key role in mitigating schedule disruptions caused by the 737 MAX crisis and the global grounding of the type.

The aircraft registered DQ-FJP has already departed Fiji Airways’ home base at Nadi for Abu Dhabi. Photo: RadarBox.com

DQ-FJO and DQ-FJP are configured differently from the rest of the Fiji Airways A330-200 fleet. Rather than 24 business class seats and 249 economy, the pair have a more spacious configuration, with 18 seats in business and 233 in economy.

Parallel histories

Data from Planespotters.net shows that the jets joined Fiji Airways in the middle of 2018 as short-term leases. Both aircraft had previously been flown by Air Seychelles.

However, digging deeper, we can see that both jets have parallel histories- flying with the same carriers at every stage of their service life. The pair began flying for Jet Airways in 2006/2007 before going to Gulf Air in 2008 on a short-term lease. They went back to Jet Airways shortly after and again were out on a short-term lease to Oman Air in 2009. After then going back to Jet Airways, the two jets went to Etihad, then Air Seychelles, and finally, Fiji Airways. Unfortunately, both jets have been inactive and parked since March 2020 with the onset of the health crisis.

Without the two A330s, Fiji Airways will have 13 aircraft in its fleet. Photo: Getty Images

Data from Planespotters.net suggests that the pair are leased from Abu Dhabi-based carrier Etihad Airways. In a way, this could explain the recent flight to Abu Dhabi for DQ-FJP. However, examining ch-aviation data, it looks like the aircraft are sub-leased, with the registered owner of both jets being Carlyle Aviation Partners. With Etihad unlikely to operate the aircraft themselves, perhaps Abu Dhabi has been selected as a storage site- until a new lessee can be found to operate the aircraft.

Airbus Updates No.3485

 Airbus Takes On Boeing With The A350 Freighter

Airbus has decided to take on Boeing by launching a new product today. While freight has always been on the back burner for the European manufacturer, this is all now set to change as it today launched the A350F during its second half result presentation.

Airbus has launched a freight version of the A350. Photo: Airbus

Airbus has been lagging behind Boeing when it comes to the freight market. While it has offered a handful of aircraft dedicated to freight, it hasn’t sold a freighter since 2015. Airbus is hoping to change this with the launch of the cargo version of the A350 announced today.

Upsetting the status quo

For some months now, we’ve heard a trickle of rumors about a possible Airbus A350 freighter. It seems that they were on the Money. It appears that Airbus is aiming to deliver the first of the type in 2025, meaning that we still have some time to go before we see such an aircraft grace the skies. Beyond receiving board approval to launch the aircraft, details about the plane remain few and far between.

Commenting on the aircraft, Airbus Chief Executive Officer Guillaume Faury said,

“Furthermore and following Board approval, we are enhancing our product line with an A350 freighter derivative, responding to customer feedback for increased competition and efficiency in this market segment.”

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More successful than the A380?

Airbus had intended to offer a freighter version of its giant A380 aircraft. The variant would have been able to transport 150 tonnes over a range of 5,600 nautical miles (10,400 km). Except for the single An-225 built, it would’ve had the highest capacity of any freighter.

The aircraft wasn’t a failure straight away. Four customers placed orders for the A380F. Emirates wanted two, and International Lease Finance Corporation eyed five. Meanwhile, cargo giants UPS and FedEx signed up for ten jets each. Airbus never even got around to building a test aircraft, with the orders all ending up canceled.

Qatar’s previous interest

Qatar had said previously that it wanted to be the launch customer for a freight version of the A350. In May, the Group’s CEO, Akbar Al Baker, told the Simple Flying Future Flying webinar,

Definitely, we will be at the front of the queue. We will be soon replacing our current fleet of freighters, and we would want to replace it with the best freighter that is available. We would be very happy to be the launch customer of the new variant…”

Qatar Airways had previously said it wanted to be the type’s launch customer. Photo: Airbus

However, the major Airbus customer is currently embroiled in a spat with the European planemaker. Qatar Airways is not now taking delivery of any new Airbus A350 aircraft. It says it has seen a faster than expected degradation of the surfaces underneath the paint job on some aircraft. The issue was first discovered when a Qatar A350 flew to Dublin to get a special paint job.

Airbus Updates No.3484

 

Airbus reports Half-Year (H1) 2021 results

• 297 commercial aircraft delivered in H1 2021
  
• H1 financials reflect deliveries as well as continued efforts on cost containment and competitiveness
  
• Revenues € 24.6 billion; EBIT Adjusted € 2.7 billion
  
• EBIT (reported) € 2.7 billion; EPS (reported) 2.84
  
• Free cash flow before M&A and customer financing € 2.1 billion
  
• Focus on securing A320 Family ramp-up and transforming the industrial value chain
  
• Board of Directors approval for A350 freighter derivative 
  
• 2021 guidance updated
  

 

Amsterdam, 29 July 2021 – Airbus SE (stock exchange symbol: AIR) reported consolidated financial results for the Half-Year (H1) ended 30 June 2021.

“These half-year results reflect the commercial aircraft deliveries, our focus on cost containment and competitiveness, and the good performance in Helicopters and Defence and Space. Although the COVID-19 pandemic continues, the numerous actions taken by the teams have delivered a strong H1 performance. This enables us to raise our 2021 guidance although we continue to face an unpredictable environment,” said Airbus Chief Executive Officer Guillaume Faury. “We are now working to secure the A320 Family ramp up while transforming the industrial set up. Furthermore and following Board approval, we are enhancing our product line with an A350 freighter derivative, responding to customer feedback for increased competition and efficiency in this market segment.”

Gross commercial aircraft orders totalled 165 (H1 2020: 365 aircraft) with net orders of 38 aircraft after cancellations (H1 2020: 298 aircraft). The order backlog was 6,925 commercial aircraft on 30 June 2021. Airbus Helicopters booked 123 net orders (H1 2020: 75 units), including 10 helicopters of the Super Puma Family. Airbus Defence and Space’s order intake by value was € 3.5 billion (H1 2020: € 5.6 billion).

Consolidated revenues increased 30 percent year-on-year to € 24.6 billion (H1 2020: € 18.9 billion), mainly reflecting the higher number of commercial aircraft deliveries compared to H1 2020. A total of 297 commercial aircraft were delivered (H1 2020: 196 aircraft), comprising 21 A220s, 237 A320 Family, 7 A330s, 30 A350s and 2 A380s. Revenues generated by Airbus’ commercial aircraft activities increased 42 percent, largely reflecting the increased deliveries. Airbus Helicopters delivered 115 units (H1 2020: 104 units) with revenues up 11 percent reflecting growth in services and higher volume in civil helicopters. Revenues at Airbus Defence and Space were broadly stable compared to a year earlier, with two A400M military airlifters delivered in H1 2021.

Consolidated EBIT Adjusted – an alternative performance measure and key indicator capturing the underlying business margin by excluding material charges or profits caused by movements in provisions related to programmes, restructuring or foreign exchange impacts as well as capital gains/losses from the disposal and acquisition of businesses – was € 2,703 million (H1 2020: € -945 million).

The EBIT Adjusted related to Airbus’ commercial aircraft activities totalled € 2,291 million (H1 2020: € -1,307 million), mainly driven by the delivery performance and the Company’s focus on cost containment and competitiveness. 

Airbus Helicopters’ EBIT Adjusted increased to € 183 million (H1 2020: € 152 million), driven by services, programme execution and lower Research & Development (R&D) spending.

EBIT Adjusted at Airbus Defence and Space increased to € 229 million (H1 2020: € 186 million), mainly reflecting the Division’s ongoing cost containment and competitiveness efforts as well as increased volume in Space Systems. 

Consolidated self-financed R&D expenses totalled € 1,262 million (H1 2020: € 1,396 million).

Consolidated EBIT (reported) amounted to € 2,727 million (H1 2020: € -1,559 million), including net Adjustments of € +24 million. 

These Adjustments comprised: 

• € +145 million related to the A380 programme, of which € +174 million were booked in Q2;
  
• € -170 million related to the dollar pre-delivery payment mismatch and balance sheet revaluation, of which € +7 million were in Q2;
  
• € +49 million of other Adjustments, including compliance costs, of which € +75 million were in Q2.   
  

The financial result was € -30 million (H1 2020: € -429 million). It mainly reflects the net interest result of € -172 million partly offset by the evolution of the US dollar as well as € +79 million related to the revaluation of the Dassault Aviation equity stake. Consolidated net income(1) was € 2,231 million (H1 2020 net loss: € -1,919 million) with consolidated reported earnings per share of € 2.84 (H1 2020 loss per share: € -2.45).

Consolidated free cash flow before M&A and customer financing improved to € 2,051 million (H1 2020: € -12,440 million), in line with the earnings performance. It also included a positive phasing impact from the timing of receipts and payments. Consolidated free cash flow was € 2,012 million (H1 2020: € -12,876 million).

The gross cash position stood at € 21.4 billion on 30 June 2021 (year-end 2020: € 21.4 billion) after the redemption of a € 1.1 billion exchangeable bond and prepayment of a $1 billion US bond, further improving leverage ratios in support of the Company’s robust credit ratings. The consolidated net cash position was € 6.5 billion on 30 June 2021 (year-end 2020: € 4.3 billion). The Company’s liquidity position remains strong, standing at € 33.7 billion at the end of June 2021. 

Outlook
As the basis for its 2021 guidance, the Company assumes no further disruptions to the world economy, air traffic, the Company’s internal operations, and its ability to deliver products and services.

The Company’s 2021 guidance is before M&A.

On that basis, the Company has updated its 2021 guidance and now targets to achieve in 2021 around:

• 600 commercial aircraft deliveries;
  
• EBIT Adjusted of € 4 billion;
  
• Free Cash Flow before M&A and Customer Financing of € 2 billion.
  

***

Note to editors: Live Webcast of the Analyst Conference Call

At 08:15 CEST on 29 July 2021, you can listen to the H1 2021 Results Analyst Conference Call with Chief Executive Officer Guillaume Faury and Chief Financial Officer Dominik Asam via the Airbus website https://www.airbus.com. The analyst call presentation can also be found on the website. A recording will be made available in due course. For a reconciliation of Airbus’ KPIs to “reported IFRS” please refer to the analyst presentation. 

Consolidated Airbus - Half-Year (H1) 2021 Results

(Amounts in Euro)

Consolidated Airbus	H1 2021	H1 2020	Change
Revenues, in millions thereof defence, in millions	24,637 3,911	18,948 4,092	+30% -4%
EBIT Adjusted, in millions	2,703	-945	-
EBIT (reported), in millions	2,727	-1,559	-
Research & Development expenses, in millions	1,262	1,396	-10%
Net Income/Loss(1), in millions	2,231	-1,919	-
Earnings/Loss Per Share	2.84	-2.45	-
Free Cash Flow (FCF), in millions	2,012	-12,876	-
Free Cash Flow before M&A, in millions	2,020	-12,373	-
Free Cash Flow before M&A and Customer Financing, in millions	2,051	-12,440	-

Consolidated Airbus	30 June 2021	31 Dec 2020	Change
Net Cash position, in millions of Euro	6,485	4,312	+50%
Number of employees	126,050	131,349	-4%

By Business Segment	Revenues			EBIT (reported)
(Amounts in millions of Euro)	H1 2021	H1 2020	Change	H1 2021	H1 2020	Change
Airbus	17,813	12,533	+42%	2,387	-1,808	-
Airbus Helicopters	2,594	2,333	+11%	183	152	+20%
Airbus Defence and Space	4,538	4,551	0%	157	73	+115%
Eliminations	-308	-469	-	0	24	-
Total	24,637	18,948	+30%	2,727	-1,559	-

By Business Segment	EBIT Adjusted
(Amounts in millions of Euro)	H1 2021	H1 2020	Change
Airbus	2,291	-1,307	-
Airbus Helicopters	183	152	+20%
Airbus Defence and Space	229	186	+23%
Eliminations	0	24	-
Total	2,703	-945	-

Consolidated Airbus - Second Quarter (Q2) 2021 Results

(Amounts in Euro)

Consolidated Airbus	Q2 2021	Q2 2020	Change
Revenues, in millions	14,177	8,317	+70%
EBIT Adjusted, in millions	2,009	-1,226	-
EBIT (reported), in millions	2,265	-1,638	-
Net Income/Loss(1), in millions	1,869	-1,438	-
Earnings/Loss Per Share	2.38	-1.84	-

By Business Segment	Revenues			EBIT (reported)
(Amounts in millions of Euro)	Q2 2021	Q2 2020	Change	Q2 2021	Q2 2020	Change
Airbus	10,541	4,964	+112%	2,044	-1,865	-
Airbus Helicopters	1,417	1,131	+25%	121	99	+22%
Airbus Defence and Space	2,423	2,440	-1%	140	126	+11%
Eliminations	-204	-218	-	-40	2	-
Total	14,177	8,317	+70%	2,265	-1,638	-

By Business Segment	EBIT Adjusted
(Amounts in millions of Euro)	Q2 2021	Q2 2020	Change
Airbus	1,758	-1,498	-
Airbus Helicopters	121	99	+22%
Airbus Defence and Space	170	171	-1%
Eliminations	-40	2	-
Total	2,009	-1,226	-

Q2 2021 revenues increased 70 percent, mainly driven by the higher commercial aircraft deliveries at Airbus and higher revenues at Airbus Helicopters.

Q2 2021 EBIT Adjusted of € 2,009 million was mainly driven by the delivery performance. It also reflected the continued efforts on cost containment and competitiveness. Q2 2020 EBIT Adjusted included COVID-19 related charges. 

Q2 2021 EBIT (reported) of € 2,265 million included net Adjustments of € +256 million, of which € +174 million relate to the A380 programme mainly for a provision release on the former A380 Lagardère facility in Toulouse.  

Q2 2021 Net Income of € 1,869 million mainly reflected the EBIT (reported), € -89 million from the financial result and € -318 million from income taxes.

 

EBIT (reported) / EBIT Adjusted Reconciliation

The table below reconciles EBIT (reported) with EBIT Adjusted.

Consolidated Airbus (Amounts in millions of Euro)	H1 2021
EBIT (reported)	2,727
thereof:
A380 programme cost	+145
$ PDP mismatch/balance sheet revaluation	-170
Others	+49
EBIT Adjusted	2,703

Glossary

KPI	DEFINITION
EBIT	The Company continues to use the term EBIT (Earnings before interest and taxes). It is identical to Profit before finance result and income taxes as defined by IFRS Rules.
Adjustment	Adjustment, an alternative performance measure, is a term used by the Company which includes material charges or profits caused by movements in provisions related to programmes, restructuring or foreign exchange impacts as well as capital gains/losses from the disposal and acquisition of businesses.
EBIT Adjusted	The Company uses an alternative performance measure, EBIT Adjusted, as a key indicator capturing the underlying business margin by excluding material charges or profits caused by movements in provisions related to programmes, restructuring or foreign exchange impacts as well as capital gains/losses from the disposal and acquisition of businesses.
EPS Adjusted	EPS Adjusted is an alternative performance measure of basic earnings per share as reported whereby the net income as the numerator does include Adjustments. For reconciliation, see the Analyst presentation.
Gross cash position	The Company defines its consolidated gross cash position as the sum of (i) cash and cash equivalents and (ii) securities (all as recorded in the consolidated statement of financial position).
Net cash position	For the definition of the alternative performance measure net cash position, see the Universal Registration Document, MD&A section 2.1.6.
FCF	For the definition of the alternative performance measure free cash flow, see the Universal Registration Document, MD&A section 2.1.6.1. It is a key indicator which allows the Company to measure the amount of cash flow generated from operations after cash used in investing activities.
FCF before M&A	Free cash flow before mergers and acquisitions refers to free cash flow as defined in the Universal Registration Document, MD&A section 2.1.6.1 adjusted for net proceeds from disposals and acquisitions. It is an alternative performance measure and key indicator that reflects free cash flow excluding those cash flows resulting from acquisitions and disposals of businesses.
FCF before M&A and customer financing	Free cash flow before M&A and customer financing refers to free cash flow before mergers and acquisitions adjusted for cash flow related to aircraft financing activities. It is an alternative performance measure and indicator that may be used occasionally by the Company in its financial guidance, especially when there is higher uncertainty around customer financing activities.

Footnotes:

1) Airbus SE continues to use the term Net Income/Loss. It is identical to Profit/Loss for the period attributable to equity owners of the parent as defined by IFRS Rules.

Safe Harbour Statement:

This press release includes forward-looking statements. Words such as “anticipates”, “believes”, “estimates”, “expects”, “intends”, “plans”, “projects”, “may” and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include statements made about strategy, ramp-up and delivery schedules, introduction of new products and services and market expectations, as well as statements regarding future performance and outlook.

By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.

These factors include but are not limited to:

• Changes in general economic, political or market conditions, including the cyclical nature of some of Airbus’ businesses; 
  
• Significant disruptions in air travel (including as a result of the spread of disease or terrorist attacks);
  
• Currency exchange rate fluctuations, in particular between the Euro and the U.S. dollar;
  
• The successful execution of internal performance plans, including cost reduction and productivity efforts;
  
• Product performance risks, as well as programme development and management risks;
  
• Customer, supplier and subcontractor performance or contract negotiations, including financing issues;
  
• Competition and consolidation in the aerospace and defence industry;
  
• Significant collective bargaining labour disputes;
  
• The outcome of political and legal processes, including the availability of government financing for certain programmes and the size of defence and space procurement budgets;
  
• Research and development costs in connection with new products;
  
• Legal, financial and governmental risks related to international transactions;
  
• Legal and investigatory proceedings and other economic, political and technological risks and uncertainties;
  
• The full impact of the COVID-19 pandemic and the resulting health and economic crisis.
  

As a result, Airbus SE’s actual results may differ materially from the plans, goals and expectations set forth in such forward-looking statements.

For more information about the impact of the COVID-19 pandemic, see Note 2 “Impact of the COVID-19 pandemic” of the Notes to the Airbus SE Unaudited Condensed Interim IFRS Consolidated Financial Statements for the six-month period ended 30 June 2021. For more information about factors that could cause future results to differ from such forward-looking statements, see Airbus SE’s annual reports, including its 2020 Universal Registration Document and the most recent Risk Factors.

Any forward-looking statement contained in this press release speaks as of the date of this press release. Airbus SE undertakes no obligation to publicly revise or update any forward-looking statements in light of new information, future events or otherwise.