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By Judson Rollins

Introduction 

Feb. 19, 2023, © Leeham News: After last week’s release of Airbus’s 2023 financial results, we undertake our annual analysis of at-risk deals on the OEM’s books.

Airbus has outstanding orders from airlines where there is a material probability that some won’t translate into deliveries. Most resulted from airlines with financial difficulties, but some were related to contractual disputes. When deliveries are delayed beyond a set period, usually 12 months, the customer can cancel orders if the delays are unexcused. Boeing flags such orders as subject to an ASC 606 accounting rule adjustment.

Unlike Boeing, Airbus isn’t subject to the ASC 606 accounting standard, so it only discloses the nominal value of its total adjusted order book in its annual report – but not at-risk orders by program.

LNA analyzed Airbus’s order books in July 2020, November 2020, August 2021, February 2022, August 2022, and December 2022 to identify at-risk orders and develop an apples-to-apples comparison. The above links explain our methodology.

Summary

• Airbus is more prone to country- and carrier-specific risks than geopolitical.
• Order risk threatens to push Airbus’s market share even higher.
• Airbus single-aisle order risk is mainly driven by low-cost carrier exposure.
• Widebody order risk is a mix of long-deferred orders and regional problems.