Travel Industry News at TravelNewsAsia.com since 1997. Interviews, podcasts, videos, pictures and more
Fri, 31 July 2020

Airbus Reports H1 2020 Results; Reduces Production Rate of A350

Airbus has reported consolidated financial results for H1 ended 30 June 2020.

Net commercial aircraft orders totalled 298 (H1 2019: 88 aircraft), including 8 aircraft in Q2, with the order backlog comprising 7,584 commercial aircraft as of 30 June 2020.

Airbus Helicopters booked 75 net orders (H1 2019: 123 units), including 3 H145s, 1 Super Puma and 1 H160 during the second quarter alone.

Airbus Defence and Spaces order intake increased to 5.6 billion.

The impact of the COVID19 pandemic on our financials is now very visible in the second quarter, with H1 commercial aircraft deliveries halving compared to a year ago, said Airbus Chief Executive Officer Guillaume Faury. We have calibrated the business to face the new market environment on an industrial basis and the supply chain is now working in line with the new plan. It is our ambition to not consume cash before M&A and customer financing in H2 2020. We face a difficult situation with uncertainty ahead, but with the decisions we have taken, we believe we are adequately positioned to navigate these challenging times in our industry.

Airbus has reduced the production rate of the Airbus A350 to 5 aircraft per month. Picture of an Airbus A350-1000 by Steven Howard of TravelNewsAsia.com Click to enlarge.

Consolidated revenues decreased to 18.9 billion (H1 2019: 30.9 billion), driven by the difficult market environment impacting the commercial aircraft business with around 50% fewer deliveries year-on-year. This was partly offset by more favourable foreign exchange rates.

A total of 196 commercial aircraft were delivered (H1 2019: 389 aircraft), comprising 11 A220s, 157 A320 Family, 5 A330s and 23 A350s. Airbus Helicopters reported stable revenues, reflecting lower deliveries of 104 units (H1 2019: 143 units) partially compensated by higher services. Revenues at Airbus Defence and Space were impacted by lower volume and mix, in particular at Space Systems, as well as delays in some programmes caused by the COVID19 situation.

Consolidated EBIT Adjusted an alternative performance measure and key indicator capturing the underlying business margin by excluding material charges or profits caused by movements in provisions related to programmes, restructuring or foreign exchange impacts as well as capital gains/losses from the disposal and acquisition of businesses totalled -945 million (H1 2019: 2,529 million).

Airbus EBIT Adjusted of -1,307 million (H1 2019: 2,193 million) mainly reflected the reduced commercial aircraft deliveries and lower cost efficiency. Steps have been taken to adapt the cost structure to the new levels of production, the benefits of which are materialising as the plan is executed. Also included in the EBIT Adjusted is -0.9 billion of COVID19 related charges.

Commercial aircraft are now being produced at rates in accordance with the new production plan announced in April 2020, in response to the COVID19 situation. The current market situation has led to a slight adjustment in the A350 rate from 6 to 5 aircraft a month for now. On the A220, the Final Assembly Line (FAL) in Mirabel, Canada, is expected to progressively return to pre-COVID levels at rate 4 while the new FAL in Mobile, US, opened as planned in May. At the end of June, around 145 commercial aircraft could not be delivered due to COVID19.

Airbus Helicopters EBIT Adjusted increased to 152 million (H1 2019: 125 million), reflecting a favourable mix, mainly in military, and higher services partially offset by the lower deliveries. The five-bladed H145 and H160 helicopters were recently certified by the EASA.

EBIT Adjusted at Airbus Defence and Space decreased to 186 million (H1 2019: 233 million), reflecting the COVID19 impact, mainly in Space Systems, partly offset by cost reduction measures. The divisions restructuring plan was updated to also reflect the impact of the coronavirus pandemic.

Three A400M transport aircraft were delivered in H1 2020. The certification of automatic low-level flight capability and simultaneous paratrooper dispatch were achieved in H1 2020, marking major milestones towards the aircrafts full development. A400M retrofit activities are progressing in close alignment with customers.

Consolidated self-financed R&D expenses totalled 1,396 million (H1 2019: 1,423 million).

Consolidated EBIT (reported) was -1,559 million (H1 2019: 2,093 million), including Adjustments totalling a net -614 million. These Adjustments comprised:

* -332 million related to A380 programme cost, of which -299 million was in Q2;

* -165 million related to the dollar pre-delivery payment mismatch and balance sheet valuation, of which -31 million was in Q2;

* -117 million of other costs, including compliance, of which -82 million was in Q2.

The consolidated reported loss per share of -2.45 (H1 2019 earnings per share: 1.54) includes the financial result of -429 million (H1 2019: -215 million). The financial result reflects a net -212 million related to Dassault Aviation as well as the impairment of a loan to OneWeb, recorded in Q1 2020 for an amount of -136 million. The consolidated net loss was -1,919 million (H1 2019 net income: 1,197 million).

Consolidated free cash flow before M&A and customer financing amounted to -12,440 million (H1 2019: -3,981 million) of which -4.4 billion was in Q2. The corresponding figure for Q1 2020 excluding the penalty payments - related to Januarys compliance settlement with the authorities - was also at -4.4 billion, demonstrating that cash containment measures including the adjustment of incoming supply started to become effective. These measures partially compensated for the reduced cash inflow from the low number of commercial aircraft deliveries in Q2.

Capital expenditure in H1 was stable year-on-year at around 0.9 billion with Full-Year 2020 capex still expected to be around 1.9 billion. Consolidated free cash flow was -12,876 million (H1 2019: -4,116 million). The consolidated net debt position was -586 million on 30 June 2020 (year-end 2019 net cash position: 12.5 billion) with a gross cash position of 17.5 billion (year-end 2019: 22.7 billion).

The companys Full-Year 2020 guidance was withdrawn in March. The impact of COVID19 on the business continues to be assessed and given the limited visibility, in particular with respect to the delivery situation, no new guidance is issued.

Other Matters

In the frame of COVID19, discussions are progressing with social partners. A restructuring provision is expected to be recognised once the necessary conditions are fulfilled. The amount is expected to be between 1.2 billion and 1.6 billion.

The UK Serious Fraud Office (SFO) has requisitioned GPT Special Project Management Ltd (GPT) to appear in court for prosecution on a single corruption-related charge. GPT is a UK company that operated in Saudi Arabia which was acquired by Airbus in 2007 and ceased operations in April 2020. The SFOs investigation related to contractual arrangements originating prior to GPTs acquisition and continuing thereafter. A resolution of GPT, whatever its form, will not affect the 31 January 2020 UK Deferred Prosecution Agreement and a value has been provisioned in the Airbus accounts.

On 24 July 2020, the Company announced it had agreed with the governments of France and Spain to make amendments to the A350 Repayable Launch Investment (RLI) contracts to end the long-standing World Trade Organisation (WTO) dispute and remove any justification for US tariffs. After 16 years of litigation at the WTO, this final step removes the last contentious point by amending the French and Spanish contracts to what the WTO considers the appropriate interest rate and risk assessment benchmarks.

See also: Airports, Air Travel and COVID19 - Exclusive Interview with SITA's President of Asia Pacific, Sumesh Patel and Emerging Travel Trends in Asia Pacific - Interview with Two Senior Executives at Sabre.

See latest Travel News, Video Interviews, Podcasts and other news regarding: COVID19, Airbus.

Headlines: Qantas Updates Flying Schedule; Plans to Reroute Perth - London Flights  Qatar Airways Extends Commitment to Combatting Illegal Wildlife Trade  EmbraerX and Pyka to Accelerate Growth of Autonomous Agriculture  United Airlines Makes it Easier to Use Credits  Cyril Kongo Designs Special Cabin for Airbus Corporate Jets  AATA and MAB to Collaborate on Pilot Training in Malaysia  India Formalises Acquisition of 56 Airbus C295 Aircraft  Bombardier Expands Partnership with GETI to Include Dallas Service Centre  Marriott Sets Net Zero 2050 Goal  Qatar Airways to Launch Flights to Almaty, Kazakhstan  CWT Appoints Joel Hanson as SD Global Innovation Business Development  Emirates SkyCargo Upgrades Booking Process with CargoWise  Airbus to Manufacture Three Full-Size Prototype Aircraft Wings  Four Seasons Anguilla Appoints Nicole Lingos Spillane as DOSM  Finnair and Turkish Airlines to Codeshare  Eve Urban Air Mobility Signs MOU with Bristow Group  Boeing Forecasts China's Airlines to Require 8,700 New Planes by 2040  LATAM Airlines to Save Fuel with Airbus' Descent Profile Optimisation Software  World Air Transport Summit and IATA AGM to Take Place in Boston 3-5 October  Bangkok Airways to Resume BKK - TDX Flights on 1 October  Sabre Travel Solutions Appoints Nicole Regel as Senior Director - AU, NZ, SP  Airbus to Deliver US-Completed Commercial Aircraft with SAF  Claude Sauter Appointed GM of The Slate Resort in Phuket, Thailand  Solomon Islands Tourism Industry in Mourning as Jo Tuamoto Passes Away  Cobham Signs New Pool Program Agreement with Embraer  The Langham, Jakarta - Exclusive Video Interview with Gaylord Lamy, GM  Pan Pacific to Open 13 More Properties by End-June 2024  First Flight of CityAirbus NextGen Scheduled for 2023  British Airways Extends Tier Status of Executive Club Members  Emirates to Increase Flights to USA  Marriott Signs W Hotel in Florence, Italy  Airbus Testing Engine Back-Up System for Helicopters  Boeing to Open Final Assembly Facility in Australia  Cathay Pacific Reports Increase in Passenger and Cargo Numbers  Eve Partners Helipass to Promote eVTOL Flights in France  Guillaume Daudin Joins ATR as Senior Vice President - Programmes  Wharf Hotels Opens Regional Sales Office in Guangzhou, China  Richard Poskanzer Appointed GM of Four Seasons Hotel Nashville  Cathay Pacific Pledges to Use SAF for 10% of Fuel Consumption by 2030  WHO Appoints Gordon Brown as Ambassador for Global Health Financing  Centel Appoints Gun Srisompong as CFO  QantasLink Launches Flights Between Brisbane and Proserpine  Alliance Airlines Signs Multi-Year Services Agreement with Embraer  Qatar Airways Joins ICAO's Global Coalition for Sustainable Aviation  United Airlines to Launch Flights Between Washington, D.C. and Lagos, Nigeria  Outrigger Hospitality Appoints Avery Aoki as CFO  Cricket Hong Kong Appoints Geoffrey Ma as Honorary President  Braathens, ATR and Neste to Accelerate 100% SAF Certification  Boeing to Build MQ-25 Stingray Factory in Illinois, USA  Rolls-Royce's All-Electric Spirit of Innovation Aircraft Takes Off for First Time  Rosewood Signs Residential Project in Lido Key, Florida  Etihad Airways Signs New Multi-Solution Technology Agreement with Sabre  Emirates to Recruit 3,500 Cabin Crew and Airport Services Employees  Susan Wheatley Returns to UK as DOSM of The Peninsula London  Air New Zealand and Airbus to Research Hydrogen-Powered Aircraft in Aotearoa  Nihat Yucel Joins Four Seasons Hotel Alexandria at San Stefano as GM  Phoenix Police Department Orders Five Airbus H125 Helicopters  Six Senses to Take Over Management of Luxury Resort in Maldives  CWT to Recapitalize Business  Lufthansa Group Signs Extensive New Distribution Agreement with Travelport  Pan Pacific Opens First Hotel in UK as UOL Completes One Bishopsgate Plaza  British Airways to Launch Flights to Azorean Islands of Sao Miguel and Terceira  Changi Renews ACI's Airport Health Accreditation  GlobalData Reports Decline in Travel and Tourism Sector Deals in August  Hotel Group in Cambodia Makes COVID19 Test Mandatory for Every Guest  Hyatt Signs Luxury Hotel in Changsha, China  Marriott Adds Domes of Corfu in Greece to Autograph Collection  Emirates Expands Virtual Reality Experiences to the Oculus Store  Swedish Project to Establish Technical Roadmap Towards Fossil-Free Aviation  Etihad Airways Signs Multi-Solution Technology Agreement with Amadeus  Bombardier Unveils New Version of Challenger 350  MQ-25 T1 Refuels U.S. Navy F-35C Lightning II Fighter Jet for First Time  Mandarin Oriental Signs Property on Wilshire Boulevard, Beverly Hills  Breeze Airways Increases A220-300 Order to 80; Unveils Livery  IATA Appoints Philip Goh as Regional Vice President - Asia Pacific  Plaza Premium Signs First Airport Lounge in Japan  Industry Must Prioritize Collaboration and Experimentation to Advance NDC Adoption  Association of Asia Pacific Airlines Sets Goal of Net Zero Emissions by 2050  Elbit Systems to Strengthen Naval Defence of Asia Pacific Country  Langham Opens Luxury Hotel in Jakarta, Indonesia  QantasLink Launches Direct Flights Between Adelaide and Townsville  Hong Kong Int. Airport Handled 222,000 Passengers in August  Rosewood Signs Luxury Hotel in San Francisco, USA  Michael Grande Joins Four Seasons Hotel Seattle as Executive Chef  Etihad Airways Upgrades Verified to Fly Service  Cascade Affiliate to Buy Controlling Stake in Four Seasons Hotels and Resorts  TSA Doubles Fines on Travellers Who Refuse to Mask  Emirates to Expand Use of Biometrics and Self-Service Kiosks  Jumeirah to Open Luxury Resort in Maldives on 1 October  United Airlines and Honeywell Invest in Alder's Sustainable Aviation Fuel (SAF)  Emirates to Resume Flights to Saudi Arabia  CWT Retains EcoVadis Platinum Status for Responsible Business Practices  SITA Achieves CarbonNeutral Company Certification  Sabre to Support Biman's Digital Transformation  Ascott Buys More Student Accommodation in USA  Real-World Data Shows Extremely Low Infection Rate on COVID19-Tested Flights  Air Astana Increases Flights to Kyiv and Istanbul  VistaJet's Cabin Hostess Training Now Includes First Aid for Pets  British Airways Launches BA Better World Sustainability Programme  Dassault Aviation in Moscow for RUBAE 2021  Airbus and Alstom to Improve Rail Transport Cybersecurity  IHG Takes Over Management of Hotel in Little India, Singapore  Plaza Premium to Transform Passenger Experience at BLR Airport in India  Thai AirAsia Flights to Chiang Mai, Chiang Rai and Hat Yai Prove Most Popular  SITA to Integrate Iridium Certus Satellit into UAC Portfolio  CWT Integrates Amadeus' Selling Platform Connect into European Service Hubs  Debbie Kristiansen Returns to Bahrain as GM of New Exhibition & Convention Centre  Air Canada Rouge Resumes Flights  US Army Takes Delivery of First Airbus UH-72B Lakota Helicopter  Marriott Opens 8th W Hotel in China  Lufthansa First Airline in Europe to Fly Airbus' New Single-Aisle Airspace Cabin  Banwa Private Island in Philippines Partners Ascent for Luxury Transfers by Air  Steve Carroll and David Ling Join CBRE Hotels & Hospitality - Asia Pacific  Korean Air to Buy Carbon-Neutral Jet Fuel from SK Energy  Deutsche Hospitality Expands Steigenberger Brand to Doha, Qatar  Turkish Aerospace Awarded Two Boeing-Related Contracts by Spirit AeroSystems  Travelport Launches Global Accelerator Program in Collaboration with AWS  Eve and Microflite to Develop Urban Air Mobility Services in Australia  Priority Pass Reports Increase in Airport Lounge Visits  QantasLink Starts Upgrading Inflight Entertainment  Saab to Upgrade Belgium's Air Traffic Control with Digital Towers  Emirates to Take Delivery of Last Brand New A380 in November  Success for Phuket Raceweek 2021  SAS Appoints Head of Media Relations in Denmark  Air Mauritius Appoints APG as GSA in Germany, Italy and Switzerland  Asia-Pacific Airlines' July Int. Traffic Down 94.2% on July 2019  FCM Partners NSF Engagement for JV in Japan  British Airways Reopens Concorde Room at JFK and London Heathrow  Griffin Orders 5 Boeing 737-8 Aircraft  CWT Meetings & Events Appoints Ian Cummings as Global Head  Behind the Scenes of Emirates Airline's Latest Ad - We're on Top of the World  Kazakhstan Orders Two Airbus A400M Aircraft  Executive Appointments at Elbit Systems  Capella Bangkok Opens 2 Verandah Suites and 6 Riverfront Villas  Air Astana to Trial IATA Travel Pass on Nur-Sultan - Istanbul Flights  Jet2 Orders 36 Airbus A321neo Aircraft  Strong Air Cargo Demand Continues in July  Bill Courtney Joins CWT as EVP and CFO  Marriott Opens First Le Meridien Resort in Maldives  Executive Appointments at Emirates  Minor Hotels Signs Third Anantara Resort in Bali, Indonesia  Bill LaPeer Joins CWT as VP of Enterprise Vertical Sales  Shadi Suleman Returns to Qatar as GM of Four Seasons Hotel Doha  Melia Chiang Mai Appoints Director of F&B and Executive Chef  Bangkok Airways to Resume Five Routes  Qatar to Host Biennial Geneva Motor Show from 2023  Plaza Premium to Open Airport Lounge at GRU in Sao Paulo, Brazil  Embraer Opens Office in Budapest, Hungary  Thailand Added to UK's Red List  Singapore Airlines Launches Upcycling Project and Competition with SUTD  Air Astana Takes Delivery of Sixth Airbus A321LR  Malaysia Airlines Upgrades Enrich Loyalty Programme  EU Digital COVID Certificate Should Serve as Blueprint for Other Nations  Bombardier Delivers Fifth Jet for Saab's GlobalEye Surveillance Solution  W Hotel Opens in Philadelphia, USA  Etihad Engineering Partners IAI for Passenger to Freighter Conversions  How's Business in Cambodia? Video Interview with Richard Dusome, MD - Dara Hotels  Puri Hiranprueck (ภูริ หิรัญพฤกษ์) Promotes Family's Private Island Near Phuket  Six Senses Offers Guests Luggage Free Travel  HD Videos and Interviews  Podcasts from HD Video Interviews  RSS News Feed and Ticker  Travel Trade Shows in 2020 and 2021  High-Res Picture Galleries  Travel News Asia - Latest Travel Industry News 

Receive our Latest Travel News Daily Email free of charge by entering your email address and name in the boxes to the right and clicking subscribe. You can also receive the news by WhatsApp, stay updated with our RSS Feed Travel Industry News by TravelNewsAsia.com, and even Add the Headlines to Your Website free of charge. Have questions? Please read our travel news FAQ.

     
Advertising
Advertising
Copyright © 1997-2021 TravelNewsAsia.com