Airbus’ 2021 results; Delivery of record net profit as it exits the pandemic

February 17, 2022, © Leeham News: Airbus presented its results for 2021 today. The company announced record net profits of €4.3bn as it exits the COVID restraints of 2020 and first half 2021.

Airbus’ problem is no longer a depressed market but how to ramp the A320/321 production to capture the demand. It expects to know by mid-year if it can go beyond a planned 65 deliveries per month by 2024.

The strong result came from deliveries of 611 commercial aircraft compared with 566 last year. Guidance for 2022 is 720 airliner deliveries, an operating profit of €5.5bn, and a Free Cash Flow of €3.5bn.

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Airbus brings BelugaST to outsized cargo market

By Bjorn Fehrm

January 25, 2022, ©. Leeham News: Airbus has decided to bring the original Beluga fleet, BelugaST (A300 based), on the market for outsized freight transport, as the newer BelugaXL (A330 based) caters for Airbus internal needs.

It has a larger cross-section than the AN-124, a tad longer freight compartment, and loads outsized but less heavy cargo. When all BelugaXLs are delivered, the ST will be spun off to a dedicated external freight company, Airbus Beluga Transport.

Figure 1. The cargo space of the BelugaST compared with the AN-124. Source: Airbus and Leeham Co.

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US 5G roll out ignores concerns for Air Transport safety

By Bjorn Fehrm

January 18, 2022, ©. Leeham News: Despite year-long protests from the World’s airlines and the FAA, the FCC (Federal Communications Commission) allows Verizon and ATT to roll out 5G base stations underneath the approach paths of landing aircraft in the US.

In 2020 the RTCA (Radio Technical Commission for Aeronautics) did tests that established the risk of 5G Base stations affecting the critical Radio Altimeters needed for bad weather landings as real.

After FAA issues a 2021 December 23 AD (Airworthiness Directive) about the danger, airlines must now decide what flights must be canceled during bad weather spells on affected airports.

Figure 1. The way the US 5G C-band base stations can affect a Radar Altimeter. Source: RTCA.

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Merry Christmas and Happy New Year

Barring breaking news of importance, your LNA team is taking the holidays off. LNA resumes Jan. 3.

Bjorn’s Corner: The challenges of airliner development. Part 30. Serial Production

By Bjorn Fehrm, Henry Tam, and Andrew Telesca.

November 19, 2021, ©. Leeham News: Last week, we described how we finished the testing and the process to get our Type Certificate.

Now we look at the phase after Design and Production certification, the start of production, Figure 1. The upstart and ramp of production have many challenges. We will start the discussion with one that is often overseen, the cost of ramping production to full serial production rate.

Figure 1. Our program plan for the aircraft. Source: Leeham Co.

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Airbus details A350F specifications

By Scott Hamilton and Bjorn Fehrm

November 11, 2021, © Leeham News: Airbus has given more information about what led to their new freighter, the A350F, and its data. Scott Hamilton talked to Airbus Chief Commercial Officer Christian Scherer at the IATA AGM on Oct. 3-5 in Boston, and Bjorn Fehrm spoke to Head of Freighter marketing, Crawford Hamilton, about the technical details. (The two Hamiltons are not related.)

The A350F is the most capable new-build freighter Airbus has designed, posing the most serious threat to Boeing’s dominance of jet freighters since the dawn of the jet age. Some expect Boeing to respond next week with a program launch of the 777XF, but LNA understands this won’t be the case.

“The market has asked us to produce it,” said Scherer of the A350F. “So we launched the program based on our own belief of the strength of the business case.”

“The A350F beats the competing production freighter (Boeing’s 777F, our note) on payload, volume, and economics,” says Crawford Hamilton. “We have taken extra care to make the door larger and the floor extra sturdy to ease loading planning and execution. The A350F will be the freight forwarder’s preferred machine.”

The Airbus new freighter, the A350F. Source: Airbus.

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Embraer 3rd Quarter 2021 results

By Bjorn Fehrm

November 5, 2021, ©. Leeham News: Embraer presented its 3Q2021 results today. The results were better than expected as the company has tight control over its spending and managed to deliver nine E-jets and 21 Business jets in the quarter, giving a revenue increase over 3Q last year of 26%.

Sales were also positive and the backlog has grown from $15.9bn last quarter to $16.8bn. Profits before tax were $30m from a loss of $37m a year ago. The strong results had the company upgrade its guidance for 2021.

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Airbus’ 9 months 2021 results; Full steam ahead

By Bjorn Fehrm

October 28, 2021, © Leeham News: Airbus presented its results for the first nine months of 2021 today. The company is now heading out of a 15 month COVID hibernation at full steam.

Market demand is strong for its Civil airliners and especially for the larger model in the A320 series. Airbus is now upgrading all four Global Final Assembly Lines (FALs) to A321 production capability.

The strong result came from deliveries of 424 commercial aircraft compared with 341 last year. Guidance remains at 600 airliner deliveries for the year but operating profit is raised to €4.5bn (was €4bn) and Free Cash Flow to €2.5bn (€2bn).

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Airbus delivers strong 1H2021 and launches A350 Freighter

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.

Artist impression of the A350 Freighter. Credit: la-livery.net

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Global airline recovery: LNA’s view shifts from traffic to revenue, but our timeline hasn’t changed

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By Judson Rollins

Introduction 

July 19, 2021, © Leeham News: A year ago last week, LNA published what might have seemed an apocalyptic call: global airline passenger traffic would not recover until 2024 at the earliest – and potentially not until 2028.

Early trends and forecast revisions by other parties point to the earlier half of our window. However, one major downside surprise has been an increasingly bifurcated world for airlines as demand returns at widely uneven rates by region and passenger segment.

Air travel is undergoing a “K-shaped recovery” like the global economy, with fairly obvious delineation between winners and losers. The upper leg of the “K” represents countries with large domestic markets, leisure travel, short-haul routes, and low-cost carriers.

The lower leg applies to developing countries, international traffic, business travel, long-haul routes, full-service airlines – and most airline suppliers.

Source: International Air Transport Association.

In hindsight, our prediction probably answered the wrong question, because the key driver of renewed profitability and future investment in commercial aviation isn’t the recovery of airline traffic, but revenue. The many changes to business and long-haul travel make revenue more difficult to forecast, but it will clearly be even slower to return than traffic.

Most industry forecasts don’t call for airline traffic to fully recover until 2024 or 2025, even if large domestic markets recover sooner. That means airline revenue – and profitability – will still be hampered until late this decade.

Summary
  • Advanced and developed economies are on widely divergent economic trajectories.
  • Global travel recovery statistics are distorted by a couple of large domestic markets.
  • Vaccine rollout and documentation issues are likely to keep borders closed for longer.
  • Revenue recovery matters more than volume, both to airlines and the aviation supply chain.

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