Aircraft Manufacturer Weathers the Economic Bumps on the Path to Long-Term Goals

Airbus has announced the results of the first half of 2022, publishing the numbers through the end of June to portray a fairly stable, promising outlook for the year so far. 

The company has delivered nearly 300 aircraft in total, with A320 series production continuing its climb upward to 75 units per month by 2025. Airbus maintains that the goal is fully attainable by then, though minor adjustments to 2022 and 2023’s ramp-up targets have been made to account for supply chain issues. The current target now stands at 65 A320s per month by early 2024, representing a slide by 6-months from their original target. Overall, Airbus appears to be on pace to ship around 700 commercial aircraft through the end of this year, with a healthy order book and a backlog that seems incapable of shrinking. 

As they stand today, aircraft on order stand at 7,046 units for commercial use, with 163 rotary aircraft also on the books. Airbus Defense also nabbed the contract for the Tiger MkIII upgrade program, with a sale of 20 new production Eurofighters to the Spanish Air Force. While overall the picture looks pretty rosy, CEO Guillaume Faury reported a complex operating environment as compounding economic effects take their toll on operational funding. A €0.2 billion charge was recorded in the company’s A400M program in the expectations of inflation on the launch contract. The space arm of the company has seen an even greater impact of rising inflation on its long-term contracts, made all the more painful by the consequences of international sanctions. As a result, the space division saw its EBIT drop to €155 million down from last year’s high water mark of €229 million. Still, Faury seems undaunted by the economic currents his company is swimming into.

“Airbus delivered a solid H1 2022 financial performance in a complex operating environment, with the geopolitical and economic situation creating further uncertainties for the industry. The supply chain challenges are leading us to adjust the A320 Family ramp-up steps in 2022 and 2023, and we now target a monthly rate of 65 in early 2024. Our aircraft delivery target for 2022 has been updated accordingly. The earnings and free cash flow guidance are maintained, underpinned by the H1 financials,” said Faury. “The Airbus teams are engaged with suppliers and partners to ramp up towards an A320 Family monthly production rate of 75 in 2025, backed by strong customer demand.”

FMI: www.airbus.com