Airbus group 1Q 2017 results: no surprises.

By Bjorn Fehrm

April 27, 2017, ©. Leeham Co: Airbus Group presented its first quarter results this morning. There were no surprises. Revenue and earnings were a bit lower than expected, but this is because a part of the company has been sold, the Defense & Space Electronics division.

There was no news on the problematic A400M. Negotiations with the customers have just begun, any results will take time to materialize.

Group results

The Airbus (the group is now called simply Airbus) revenue and adjusted EBIT (before Mergers & Acquisitions) were as expected, €13bn (€12.2bn 1Q2016) and €240m (€500m). Reported EBIT was €900m, boosted by the sale of the Electronics division.

The commercial aircraft division is the motor of the group with 75% of revenue and 117% of adjusted EBIT. Helicopters had sales which has picked up, but results are affected by lower use of the helicopters that have been sold. Defense (ex A400M) is doing ok in a non-expanding market.

Guidance for 2017 is kept.

Commercial aircraft

Sales have been slow at net six aircraft, but deliveries are higher than last year at 136 aircraft compared to 126 1Q 2016.

A320

Airbus plans to deliver around 200 A320neos during 2017. Key to achieving the target will be engine deliveries, especially from Pratt & Whitney. The Pratt & Whitney engine issues are worked upon. There will be more testing during the year to make sure the fixes also work. Airbus has flexibility to substitute ceo models instead of neo. This has already started with JetBlue extending its stream of A321ceos instead of taking neo models. Rate 60 in 2019 is in plan.

A330

The first flight of the A330neo has moved from end of the second quarter to after the summer. Delivery is set for first half 2018. Airbus is not worried it can fill the still open 2019 slots. The A330neo has good margins and there is pricing flexibility if needed. The present rate six is comfortable. It would be easy to land at rate seven, should it be needed, as the slowing down to rate six is still ongoing.

A350

Sub-supplier deliveries (read: cabin items) are picking up, 13 (6) aircraft were delivered during 1Q. There are still quality issues on toilets and seats but these are now handled in the field. Rate 10 at end of 2018 is in plan.

A380

The lowering of the production rate to wait out the market is progressing to plan. Cabin densification projects has eased the pressure for new engines for now.

Helicopters

The market is still weak and the Super Puma grounding for the North Sea is still not resolved (grounding in 2Q 2016). Deliveries were up at 78 units (56) as was revenue €1.29bn (€1.16bn) but EBIT was down at -€2m (€33m).

Defence and Space

Revenue down at € 2.1bn (€2.5bn) as the Electronics division was sold (revenue about €0.5bn). Adjusted EBIT (ex spin off) was down at €63m (€107m).

A400M

A total of 4 A400M were delivered during 1Q. Airbus has entered in negotiations with the six Nations customer organization OCCAR. It’s too early to say what will be the result of these negotiations. Any adjustments to provisions will have to wait until the negotiations are finished.

31 Comments on “Airbus group 1Q 2017 results: no surprises.

  1. “A320

    Airbus plans to deliver around 200 units during 2017.”

    I guess this is a typo, – and production rate is 60/month.

  2. IMHO, PW probably will not deliver its promised 350-400 engines in 2017. Too much of its resources will have to go to fixing in-service engines. Fixing all the engine problems, and getting fully back on its promised delivery schedule, is not possible by Dec 2017.

    Also, for the first time that I have seen, Leeham yesterday reported that Leap is also having rampup problems.

    • Its not clear why they are deferring some widebody orders like this. The planes they are replacing are often 20 years plus. Delta is deferring new widebodies , yet buying others castoffs ( Malaysian 777s ultra cheap)

      Could it be just a ‘reaccommodation’ strategy ( not for the passengers this time) to get better prices for planes ordered previously ?

      • More likely the US Gouverment putting pressure on US Airlines to buy American if they want US Goverment contracts. It has been going on for some time, like FedEx 767’s that have huge Gouverment contracts US Postal Service is just one of them and now UAL, AA and DAL delays on Airbus widebodies especially those with RR Engines only. It is more trouble do put the same pressure on Airbus narrowbodies as some are assembled in Mobile Alabama.

          • claes:

            Can we get off the US Government conspiraiy theories?

            First of all FedEx ordered their stuff well before the petulant one took office when Mr. Obama can’t we all get along was in office.

            Worse, you seem to think the US Government is capable of a conspiracy . You vastly over estimate the US Government.

            FedEx boxed itself in with the DC-10s. Old, rotten, horribly expensive too short range aircraft without a saving grace to their name.

            Boeing offered FedEx the deal of a lifetime to keep 767 prodcu9ton going while they worked out the KC46 kinks.

            FedEx got the USPS contracts because they have by far the better air freight system.

            Sheese.

          • The US Goverment is a huge buyer of Fed Ex services, so they have leverage to influence decisions. The same for pax tickets and cargo on United and American. So when they replace American widebodies with Ameican engines to EU aircraft and UK engines it hurts America. As the goverment have a choice they can easily explain to a US airline how they should behave not loose goverment business. Price is not everyting for a patriot..

  3. Was there not mention of pricing issues with the A330 program? Customers were looking to go to the NEO and not take the CEOs? If that’s the case the current demand for CEOs might be over stated and the NEOs understated? Profits for the program might be impacted?

    Were there also concerns about finished goods inventory for the PW A320NEOs and A350s? ANd whether customers/Airbus were satsified with the PW fix?

    • The website has incomplete information. The A350-1000 fleet has made many test flights over the past three months.

      • Theres plenty of footage of the A35K on youtube. Its just not official Airbus footage. Theres also A330 NEO stuff but I havent seen a Trent 7000 yet. I really want to see the NEO with its .. NEOs.

          • I think there is a market for 330-200/300 “CNEO’s” using the NEO’s wing and other updates but current engines (maybe tweaked), especially for GE operators.

            Airbus is apparently looking to increase the MTOW of the 330-900 to ~250T. Personally I believe there is a market for a 330-800LR with a range of 8000-8500Nm making use of the increased MTOW.

    • @NCPx

      A great site and it is frustrating that they have not managed to update that portion of it. Can’t really complain, they have made the site so sophisticated it must take considerable time to maintain

  4. Hmm, no word about the ongoing U.K. bribery investigation?

    • Just the usual pitch “we are working with the authorities to lift this ban as soon as possible”. Has been the pitch since the investigation started, no news there.

      • It will be resolved the same day the US Ex-Im bank is fully up and running again…

  5. I see the NMA like this:
    Boeing 757-2X and 757-3X
    Airbus A325

    • An NMA could kill Boeing.
      The RR Advance/Ultra might be the last typical jet engines.

      Electric Extra: https://youtu.be/B0RY1KaIWMI
      Lilium: https://youtu.be/ohig71bwRUE

      One turbine + batteries or two turbines to generate electricity and distributed electric fans can create incredible bypass ratios.

      Imagine Boeing rolls out an NMA and Airbus announces to produce an electric aircraft competitor?

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