43 Comments on “Airbus 1H2024 results: Space business problems lower results”

1. “The net cash position at the end of 1H2024 was €7.9bn. Liquidity was around €30bn.”

   For reference: BA’s net cash position is currently MINUS $50B…comprising cash on hand (ca. $7B) minus gross debt (ca. $57B).
   (we’ll get the exact figure tomorrow).

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   • I can hear tomorrow’s spin already..

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2. Ironic that the US went with a European type initiative funding Space X and Boeing for launch services.

   Boeing of course is a flop but Space X is running Arianespace out of space.

   Divesting out of the Arianespace operation seems like a good move for Airbus as it would be for Boeing.

   The investment to just match Space X and not improve it would be huge (and none of the current offerings for launch even match Space X)

   I never thought I would see rate 12 for the A350. Not because its not selling but that seems to be above the historic average for a 777 sized aircraft. Rate 7 would seem to be long term.

   Same for the 787. I don’t see the Rate 14 they hit (or targeted) as sustained. Rate 10 at most.

   It will be interesting to see how A330NEO sales go.

   While I don’t see it happening, getting the A330 built in the US would be very cool (tanker contract). Also of course does Airbus shift to the NEO for the A330MRT hull.

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   • More problems with Boeing KC46A Tanker. https://www.defensenews.com/air/2024/07/30/boeings-kc-46-has-a-new-top-tier-deficiency/

     Time USAF dropped this turkey and sign onto the Airbus A330 Tanker which is being certified with NEO hull in a couple of years with all the current capabilities, that the Boeing K46A is unable to match, and additional capabilities promised by Airbus in the near future.

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     • Well that is an interesting take.

       If you look in depth at the issue its another miner one that if not corrected could have significant consequences.

       All my reading indicates that the A330MRT has not been supplied to anyone with the full USAF suite of features. You do see them adding some of those on as options.

       Unfortunately there are some secret aspects to the USAF KC-X specs that will never be made public and A330MRT buyers are not going to advertise full capability as well.

       How long would it take Airbus to ramp up to two A330MRT CEO a month let alone the not produced yet A330MRT NEO? Right now the USAF gets two KC-46A a month.

       There always is that complex decision of a bird in the hand vs two in theory not to mention no A330MRT has been built to USAF specs. It would have to undergo the full testing process, IRP and then full rate.

       So, call it 3 years and in the meantime the USAF is shorted itself 72 tankers.

       Worst case these replace a KCC-135 one to one and that discounts the other features a KC-46A can serve (command node, EW suite).

       A while back a female KCCC-46A pilot compared the two aircraft. She did not go into any secret aspects, but just as tankers it was some plus to the KCC-46A and some to the A330MRT.

       I can see the USAF needs both but that would mean a new project and I do not see congress approving that. Extending (pun) the KC-46A contract as has been talked about.

       Regardless, just the base need for tankers means the KC-46A is hugely needed and can and does do the mission. Yes it needs the RWS fix but that to is complex as the USAF did not like is wide vision part they specified (and Boeing met). Boeing in turn failed in the close in portion. So its a joint fix that addresses both with an upgrade.

       As was noted by a pilot, there are always issues with sun angles and tanking and no tanker and or receiver are immune to that.

       Right now the KC-46A can tank anything but an A-10 and even then it can tank an A-10 if required, its just not scheduled (the USAF spec was met on the boom but it was wrong so the USAF is paying for that fix).

       Auto fueling with the A330MRT is interesting but other than Singapore I don’t know anyone else has specified it and I don’t see any reports as to how much Singapore is using it.

       If my numbers are right, there are around 100 KC-46A in service and pilot reports are they are enthralled with its updated capability over the KC-135.

       There are now upgrades considered or committed to for the KC-135R now as well. Just not enough tankers.

       It would be interesting to see private fueling firms buy a bare bones KC-46A and or A330MRT. Germany used a private firm to fuel its Typhoons across the Pacific to Hawaii recently.

       Its worth a look at the F-35 program that has been a costly mess and still is, but people keep buying it because its so far superior to anything else.

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       • I’m sure the K-46A will work out in the end while BDS continues to bleed cash and “loose” $$$.

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         • +1

           😉

         • Reader Comment Rules
           Not Permissible
           3. No attacks or criticisms about grammar, spelling or sentence structure. Not all people have the same levels of education and furthermore, bi-lingual Readers may not be fluent in their second language; neither negates their right to their opinion. Criticisms of these areas are meant to attack their credibility rather than debating the issues. This line of attack is absolutely verboten;

         • Relax, it’s in quotes and a reminder only.

         • A reminder? Whatever. You and Vincent have a history of this regarding TW.

       • Why all this defense of the Boeing product.

         Airbus has already announced that the MRTT is moving to the NEO (A330-800) airframe in a few years. I am sure that if the USAF is serious about acquiring the superior European tanker, Airbus would be able to get the NEO model up and running and certified in the current configuration (use RSAF model as baseline), within 3 years. It is essentially moving and integrating the kit in the CEO into the already certified NEO airframe. Note also that Airbus can setup an integration line in the USA as they were promising to do with the Lockheed partnership proposal of a couple of years ago.

         The NEO airframe has a higher MTOW, more aerodynamic wing, and flies further than the CEO. The integration of additional USAF specific equipment should not adversely impact the range and performance of the NEO model, especially in comparison to the KC-46A currently being procured by the USAF.

         Off course the most USAF pilots will have good things to say about the KC-46 since the only comparisons they will be able to make is against the ancient KC-135 and KC-10 models. Few would have had the experience of being refueled by a MRTT especially the RSAF model.

         Finally as @Pedro states above, continuing with the KC-46A is only ending up in bleeding Boeing and the USAF financially while also delivering a flawed and inferior (vis-a-vis the MRTT), product. I think it would be in all parties interest that the KC46 program ends and the USAF contract to procure the MRTT. The MRTT is a better trans-pacific ocean plane (longer range, more off-loadable fuel payload, better cargo and passenger payload). If one factors in the the continuing cost overruns and the problems associated with the current KC46 program I think an off the shelf Airbus MRTT order for 50 units will cost, on a per unit basis, less than the KC46.

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         • How exactly is the KC-46 bleeding the USAF financially? You are aware, aren’t you, that Boeing is responsible for all the development cost overruns?

         • @ Mike Bohnet

           As regards USAF costs:

           “Air Force’s Mismanagement of KC-46 Tanker Program Is Costing It $100 Million, IG Says”

           https://www.military.com/daily-news/2021/05/28/air-forces-mismanagement-of-kc-46-tanker-program-costing-it-100-million-ig-says.html

           That’s on top of the increased operating/maintenance costs of having to keep older tankers in service for longer.

         • @ Mike Bohnet
           The KC-135 with 4 antique engines guzzles kerosin like mad. Also the KC-135 can’t act as a real freighter aircraft. So US AF either has to use C-17 or rent capability.

           You are aware of the fact that Boeing is maintaining the KC-135 fleet? If you have to pay for maintenance for a jurasic aircraft it won’t be cheap. These costs alone would have made the A330MRTT the winner due to costs but the competition didn’t factored risk into its equations for calculating the price. US Air Force mentioned this:

           A330MRTT: development risk: moderate
           KC-767-2C: development risk: high

       • “Unfortunately there are some secret aspects to the USAF KC-X specs that will never be made public …”

         IMU most of the KC-46A deficiencies are in the public domain now. Or is there still a fount of failures that keeps on giving?

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         • “Unfortunately there are some secret aspects to the USAF KC-X specs that will never be made public …”

           OMG thanks our poster letting us know Airbus/Northrop Grumman didn’t know what they were doing, but how on earth our poster has such indepth knowledge of “top secrets”??

         • Pedro:

           Seldom worth a reply but its there regardless.

           Airbus could bid on it as they had the security clearance so see those requirements.

           Those specifications are not public and will never be. It does not mean Airbus could not meet them, right now they have never built an aircraft that does. They have been copying some of those specs in as time goes by.

         • “Those specifications are not public and will never be. ”

           Whatever.
           Cue the MRTT vision system Airbus seems to much better match required specs than Boeing’s effort can muster.

           Then they seem to have a realistic vision into the future of their products and plan accordingly.

       • If you like to fly on a safe tanker aircraft you can book your flight from Brize Norton to the Falkland Islands.

         I said it back in the days during the first real tanker competition. There is an option for new engines on an A330. There will be no option for new engines for a 767 due to the 787 except US taxpayer pays Boeing. With China as the mayor threat nowadays US Air Force needs a tanker with a long range. KC-A330neo would be a greater tanker than KC-10.

         “no A330MRT has been built to USAF specs.”
         Nobody else wants such low standards. A330MRTT is certified to transport paying passengers. See flights from the UK to Falkland Islands.

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     • “Kevin Stamey, the Air Force’s program executive officer for mobility and training aircraft, told reporters Tuesday Boeing has worked quickly to repair damaged ducts and the program is currently testing a workaround for the issue. A longer-term design fix is likely, he added, noting that the deficiency may soon be downgraded to a lower category because of these measures.”

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     • “Asked whether the service is concerned the company’s development issues portend later future production challenges, Stamey was optimistic about Boeing’s quality management efforts.

       “To their credit, they lean forward when they have a quality escape,” he said. “They’ve added inspectors on the line and they’re very sensitive to it.”

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   • Beware of dog and pony show:
     Bloomberg
     “For Delta, the memory of a failed 2022 demonstration still hasn’t faded, according to people familiar with Starlink’s efforts to win over the airline.
     Delta executives were eager to test Starlink internet but as its jetliner flew upwards of 30,000 feet over Chicago, the plane wasn’t connecting to the service. As a quick fix, SpaceX turned off internet for some paying customers in the city below, these people said.”

     Motley Fool: Despite Rare Profit, SpaceX Still Mostly Loses Money
     “According to the materials WSJ reviewed, SpaceX lost $968 million in 2021, and $559 million in 2022.”

     Remember the co. called WeWork?? Great company with inflated valuation and lost tons of $$$

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     • You’re living in the past (2022). In early 2022, when Starlink did the demo for Delta, there were about 2300 Starlink birds in orbit. Now, in mid 2024, there are about 6300 Starlink birds in orbit. The early bandwidth problems have pretty much disappeared for customers, and the system will only get more robust as more birds are added.

       You’re are also in the past with your Starlink financial news.
       Ars Technica: Analyst on Starlink’s rapid rise: “Nothing short of mind-blowing”
       “Starlink’s estimated free cash flow this year is about $600 million.”
       https://arstechnica.com/space/2024/05/just-5-years-after-its-first-launch-the-starlink-constellation-is-profitable/

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       • Again the use of the FCF metric, doesn’t really tell you the current profitability of the operation.

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         • Did you bother to read the article that I posted? The analysis goes way more in depth that just FCF.

         • Sometimes I hate writers that only tell one side of the story or suffer from “pathological optimism”.

           ‘Last month, Bloomberg reported [subscription] Starlink was still burning through more cash than it brings in, citing people familiar with the finances, potentially still losing “hundreds of dollars on each of the millions of ground terminals it ships.” The same people suggested parent SpaceX “*often strips out the hefty cost of sending its satellites into space to make the non-public numbers look better to investors*”, adding Starlink was ” not actually profitable based on an operational and ongoing basis.”’

           https://www.mobileeurope.co.uk/starlink-could-reach-6-6bn-revenue-this-year-quilty-space/

           Bloomberg:
           “They describe the company’s accounting as “more of an art than a science” and say it’s not actually profitable based on an operational and ongoing basis.”

           Reminds me of another aerospace giant (former?).

         • Mr. Mike, I did read the article. All it essentially says this guy built a financial model (Starlink financial being not available) that he gives us no information what went into the model, source of data for the model etc., and the researched teased out EBITDA of US$3.8 billion and then informs us that Capital Expenditure is US$3.1 billion and FCF is US$600 million and therefore Starlink is profitable. I don’t know who this Quilty guy and based on the limited information provided in the article I am expected to accept what he says…Ok!

       • branaboy:

         You seem to forget it took Airbus 5 years to get RAAF certification and that was not an advanced spec A330MRT.

         One logical glare I can prove is you said USAF pilots getting fuel. I am talking about pilot that flew both aircraft, not got fueled. Fueling is agnostic, they all do it with no issues. The A330MRT is no exception but its also not a problem.

         As for the A330MRT being superior, how come they keep upgrading it? They do it because it does not have the full spectrum the USAF spec called for.

         Airbus has not committed to an A330MRT NEO, they indicate they will but its not a given.

         The KC-46A has a full on cargo door that you can roll on full sized cans as well as the freight handling system. The A330MRT does not.

         No questions the A330MRT offers some fueling aspects, I saw the charts, if you are sending a strike out of Anchorage then it has a benefit. If we are sending strikes out from ANC there is such a huge problem that those strikes are not happening, we are defending the 5th Island Chain.

         When you put new equipment in with other equipment, you in turn can have issues. That is why its tested as a package not each indivual one.

         The Saudi Air Force is not flying in the worlds nastiest air defense area. The USAF specs for the worst.

         Regardless, if you did nothing but replace KC-135R with a KC-46A, you would be a huge up.

         they have upgraded the KC-135R, but you are trying to upgrade on top of old hardware.

         That is another aspect of the KC-46A, it was designed for future upgrades. I suspect some of those have been added though you aren’t going to see that in the public domain as the areas would be an EW, defense and com suites.

         Its one lesson the USAF learned on the F-22, fantastic aircraft and its com system is not intended as a node info sharing like the F-35 (there is a reason the F-35 is selling bucket loads)

         You loose sight of the fact that not all tankers are super long range missions. Europe in fact would not be. Pacific depends on what bases are at risk. The US has just pushed back the Pacific envelope as they deployed the AIM174-B and the upcoming AIM-260 is going to be equally major.

         A lot of Alaska ops is training (and ready to deploy). Our tankers do not range the world normally though they can dispatch and fill in as needed. KC-46A is more than capable there and can replace some KC-135R.

         Spain has at least a squadron and they just exist to fill aircraft passing through. You don’t need super long range there either.

         The A330MRT is not stealthy. The range of the aircrtaft it fuels is a factor, it would be hard pressed or harder unless it has an equal EW package to the KC-46A (it can get it) so you have to take the fueled aircraft close enough in the tanker is at risk no matter what its range.

         I am all for A330MRT supplementing the KC-46A. We sure are not going to stop building KCC-46A waiting for that to happen.

         The USAF has mis mange3d its new build up, decisions have to be made on where the money goes.

         In the meantime we have good allies that do have A330MRT, Australia, Singapore and South Korea. Its not like we can’t mix and match, the USAF does not have to be stand alone.

         As for the superior passenger carrying, hmmm. Was it not a Brit A330 not so MRT that jammed its controls a while back and came close to wiping out its passengers?

         Pretty weird for someone to say that when what you have is a dumbed down tanker that has no boom.

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         • “You seem to forget it took Airbus 5 years to get RAAF certification and that was not an advanced spec A330MRT. ”

           It took the RAAF (and to a part Airbus) a couple of years to have the system active and ready in scope of RAAF operations.

           RAAF was rather open about “having to learn a lot …”

           You have a knack for misrepresenting ….

         • “You have a knack for misrepresenting ….”

           Sound familiar.

   • “While I don’t see it happening, getting the A330 built in the US would be very cool (tanker contract). Also of course does Airbus shift to the NEO for the A330MRT hull.”

     They are not going to get any major contract for political reasons anyway, so why spend money in US? If they need more mfg capacity there is whole Central Europe that would happily welcome Airbus. I think Airbus management sometimes needs a reminder where are they from.

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     • The reason to pay stuff in the dollar area is to mitigate the exchange rate risk. As long as airplanes are mostly paid in dollar its a risk to produce 100% in another currency.

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       • On the other hand, manufacturing anything in the US creates exposure to possible export controls, so as to ptotect “national interests”.

         ASML can tell you a lot about that.

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       • The reason that Airbus has the Alabama facility was to get Congressional support for future programs.

         In fact it was the A330MRT bid that was overturned as illegal that was going to be in Alabama in the first place.

         That morphed into the A320 for the same reasons, you want US defense bids you need a US presence and congressional buy per Jeff Sessions was the way to do it (at one time one of the more powerful senators)

         An A330MRT win and it has to be assembled in the US. However, it would need US engines and the NEO of course does not have those. In fact its a derivative of the proble3wm laden Trent 1000/TEN aka 7000 bleed air version.

         So now you wold have to put a GE engine on it and the delay and cost added.

         In 5 years you start getting tankers. But Airbus has to consider is it worth it.

         In the meantime you still need tankers, so Boeing gets extended KC-46A (its fully allowed in US Law as an extension).

         The USAF likely would not think is worth it. They would rather have 5 different fighters! (granted they often share engines and missile/bomb systems)

         So when your tankers are a wash, no you are not going to give a new contract.

         You might sell a new contract on the basis of one aspect like the4 KC-10. I don’t think so and the US assembly is an issue as the NEO would have to be built in Europe and the CEO here or the whole shebang here as there is not enough NEO production to share out.

         In the meantime our Allies can help us out with A330MRT so its the best of both worlds.

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3. ArianeGroup’s (50/50 joint venture between Airbus and Safran) performance on the Ariane 6 development program has been very Boeingesque. Way late (therefore way over budget) and under-performing. The recent first flight was only partially successful, leaving the upper stage and two payloads as space junk for at least the next 10 years.

   Ariane 6 is not really new technology. The booster is essentially an upgrade of the Ariane 5 booster, but with an eye toward reducing production cost. The upper stage Vinci engine is “new”, but was under development since 1998 as an Ariane 5ME upgrade, way, way before the Ariane 6 program was launched. The only real new, recently developed, tech is the APU in the upper stage that facilitates multiple Vinci re-lights. And… this is the part that failed in the first flight. So, very little new tech for a ridiculous amount of development time and cost, and the new tech didn’t work quite right.

   Don’t get me wrong, Ariane 6 will be a reliable workhorse launcher for Europe going forward and is sorely needed for Europe’s independent space access. However, it will only ever be cost competitive with other expendable launchers. It will never come down anywhere near the launch costs of partially reusable systems like the Falcon 9. It will always have a mandated customer in ESA and will win certain contracts (like Amazon) due to politics, but it will never again dominate the world’s commercial launch industry like it did in the past.

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   • I think there are lots of politics in these Airbus statements.

     Finally the Ariane 6 made it successful first launch 2 weeks ago. Delayed for ~5 years. While the commercially successful Ariane 5 made it last launch last year. Imagine the fixed cost / lost customers.

     The pressure to restore independent European launch capacity is huge. Specially after Russian launch capacity fell away. The new US launching companies benefit from the situation.

     Ariane 6 can not be compared to the reusable programs in term of payload/ orbit reach. Ariane 64 launch next year.

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     • My take is Ariane 6 is like the Vulcan rocket. Backup, not needed. Its critical to have backup

       Europe and US should collaborate on the backup and cut the costs.

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       • It needs to be a backup versus the US!

         Collaborating with your threat source does not make any sense.

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         • You might ask yourself what the real threat is vs the tin foil threat

4. Off topic:
   Boeing announced new CEO and president.

   Reuters
   Boeing posts bigger loss as defense business struggles to turn around

   https://investors.boeing.com/investors/news/press-release-details/2024/Boeing-Reports-Second-Quarter-Results/default.aspx

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   • Forgot to add:
     FCF ($4.3) billion
     Operating cash flow of ($3.9) billion (non-GAAP)*

     “Cash and investments in marketable securities totaled $12.6 billion, compared to $7.5 billion at the beginning of the quarter driven by the $10.0 billion issuance of new debt partially offset by the usage of free cash flow in the quarter (Table 3). Debt was $57.9 billion, up from $47.9 billion at the beginning of the quarter due to the issuance of new debt.”

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     • Thanks for those numbers. Hasn’t one commenter here been telling us about
       BA’s success in *paying down* their debt?

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       • -> ‘ “profit” isnt the metric for large companies
         Free cash flow is’

         Looks like FCF is much worse than loss per GAAP.
         😂

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