Low Cost & Regional

Airbus “makes progress on adapting to Covid-19 market” as 3Q commercial revenues fall 33 per cent

Airbus A321neo

Airbus’ commercial revenues were down by a third (32.9 per cent) in the third quarter compared to the year-before period, to €7,738 million. Adjusted earnings dropped by 52.4 per cent year-on-year, to €666 million.

The results came amid a fall in deliveries and lowered cost efficiency.

Airbus 3Q key figures
Airbus third quarter key figures. Click to enlarge.

In the first nine months of 2020, Airbus’ consolidated revenues fell by 34.6 per cent to €30.2 billion. This was attributed to the “difficult market environment impacting the commercial aircraft business”, with around 40 per cent fewer deliveries year-on-year.

A total of 341 commercial aircraft were delivered in the first nine months, compared to 571 in the same period in 2019. These comprised 18 A220s, 282 in the A320 family, nine A330s and 32 A350s. During the third quarter of 2020, a total of 145 commercial aircraft were delivered including 57 deliveries in September.

Airbus’ adjusted commercial earnings for the first nine months fell from €3,593 million in 2019 to €-641 million. As well as reduced deliveries and lower cost efficiency, this also included €-1.0 billion of Covid-19 related charges.

Airbus key figures for the first nine months. Click to enlarge.

Airbus said the “necessary steps” have now been taken to adapt the cost structure to the new levels of production, with benefits now starting to show. At the end of September, the number of commercial aircraft that could not be delivered due to Covid-19 had reduced to around 135.

“After nine months of 2020 we now see the progress made on adapting our business to the new Covid-19 market environment. Despite the slower air travel recovery than anticipated, we converged commercial aircraft production and deliveries in the third quarter and we stopped cash consumption in line with our ambition,” said Airbus’ chief executive officer Guillaume Faury.

“Furthermore, the restructuring provision booked shows our discussions with social partners and stakeholders have advanced well. Our ability to stabilise the cash flow in the quarter gives us confidence to issue a free cash flow guidance for the fourth quarter.”

Airbus 9M deliveries
Click to enlarge.

Net commercial aircraft orders for the first nine months totalled 300, compared to 127 in the year-before period. Airbus’ order backlog comprises 7,441 commercial aircraft as of 30 September 2020.

Airbus also took a €26 million hit in the third quarter relating to programme costs for its discontinued A380, with the total for 2020 now standing at €358 million.

The company withdrew its full-year 2020 guidance in March and said no new guidance would be issued on commercial aircraft deliveries or earnings due to the continued impact of Covid-19.

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