By Bjorn Fehrm
July 29, 2020, © Leeham News: Airbus presented its results for the first half of 2021 today. The company reported a profit of €2.7bn on a turnover of €24.6bn, a very strong result from the -€0.9bn of last year. Yesterday, the Airbus board gave the go-ahead for the A350 freighter with planned entry into service 2025.
The strong result came from deliveries of 297 commercial aircraft, 100 more than the 196 of 1H2020. Net orders were 38 aircraft (1H2020 196). Guidance for 2021 was increased to 600 airliner deliveries with operating profit at €4bn and Free Cash Flow of €2bn.
Revenue for 1H2021 was €24.6bn (€18.9bn 1H2020), operating profit was €2.7bn (called EBIT adjusted, -€0.9bn 1H2020), and net profit was €2.7bn (-€1.6bn).
Free cash flow for 1H2021 was €2.0bn (-€12.4bn), and the net cash position end 1H2020 was €6.5bn (end 2020 €4.3bn).
Guidance for 2021 is now:
Of the 297 delivered aircraft, 237 was A320/A321, 21 A220, 30 A350, 7 A330 and 2 A380. Orders were at a modest Gross of 165 (365) with a Net of 38 (298) after cancellations. The drop compared to 2020 reflects a pre-COVID market (1H2020) to today’s uncertain situation.
Airbus CEO Guillaume Faury said the outlook for air travel is mixed, with increased domestic market demand in the US and China and a modest recovery in the internal EU market. But new virus variants delay recovery time after time and China’s domestic growth has tapered off as pockets of Delta variant infections have re-introduced restrictions.
The big news was the launch of the A350 freighter, with entry into service (EIS) 2025. As we predicted here and here, the freighter will be based on predominately A350-1000 components to cater for a maximum payload “in excess of 90 tonnes”.
To understand the rationale for how the freighter is a mix of -1000 and -900 components and why this can minimize the development effort, read the articles. These also predict the operating cost advantage of the A350F over its incumbent competitor, the Boeing 777F.
The development of the freighter will use the more agile development processes from the Beluga XL project, including an integrated digital 3D toolchain from the Airbus DDMS project.
Faury said the market for freighters would boom after 2025 as a replacement wave sets in combined with problems for incumbent freighters as stricter ICAO CO2 rules make these non-compliant for emissions.
Faury emphasized Airbus is continuing its investment in lower carbon footprint technologies such as hydrogen and will lead the airliner industries conversion to such aircraft.
The challenge for Airbus Commercial Aircraft is now to ramp the A220 and A320 programs from today’s rates up to pre COVID rates and then higher. A lot of supplier support is rolled in, including direct financial support to help the supply chain expand after a challenging period since 2Q2020.
Faury said, “The Airbus supply chain is in comparatively good shape as the production was reduced but then remained stable at a rate 40 for the A320 and four for the A220”.
The re-shaping and re-integration of core aerostructures are progressing. The commodity parts company creation is more challenging, with tough negotiations with the involved unions. Airbus would ideally merge this into an external activity, said Faury, to gain the benefits of scale for these more commoditized products.
The helicopter market is recovering and the division increased revenue 11% to €2.6bn and profits 20% to €0.2bn.
Revenues were stable at €4.5bn, with a €0.2bn profit.
Two A440M were delivered in 1H2020.