Tag Archives: Airbus

Airbus reveals new zero-emission concept aircraft

Airbus has revealed three concepts for the world’s first zero-emission commercial aircraft which could enter service by 2035. These concepts each represent a different approach to achieving zero-emission flight, exploring various technology pathways and aerodynamic configurations in order to support the Company’s ambition of leading the way in the decarbonisation of the entire aviation industry.

All of these concepts rely on hydrogen as a primary power source – an option which Airbus believes holds exceptional promise as a clean aviation fuel and is likely to be a solution for aerospace and many other industries to meet their climate-neutral targets.

“This is a historic moment for the commercial aviation sector as a whole and we intend to play a leading role in the most important transition this industry has ever seen. The concepts we unveil today offer the world a glimpse of our ambition to drive a bold vision for the future of zero-emission flight,” said Guillaume Faury, Airbus CEO. “I strongly believe that the use of hydrogen – both in synthetic fuels and as a primary power source for commercial aircraft – has the potential to significantly reduce aviation’s climate impact.”

The three concepts – all codenamed “ZEROe” – for a first climate neutral zero-emission commercial aircraft include:

 

A turbofan design (120-200 passengers) with a range of 2,000+ nautical miles, capable of operating transcontinentally and powered by a modified gas-turbine engine running on hydrogen, rather than jet fuel, through combustion. The liquid hydrogen will be stored and distributed via tanks located behind the rear pressure bulkhead.

 

 

 

A turboprop design (up to 100 passengers) using a turboprop engine instead of a turbofan and also powered by hydrogen combustion in modified gas-turbine engines, which would be capable of traveling more than 1,000 nautical miles, making it a perfect option for short-haul trips.

 

A “blended-wing body” design (up to 200 passengers) concept in which the wings merge with the main body of the aircraft with a range similar to that of the turbofan concept. The exceptionally wide fuselage opens up multiple options for hydrogen storage and distribution, and for cabin layout.

“These concepts will help us explore and mature the design and layout of the world’s first climate-neutral, zero-emission commercial aircraft, which we aim to put into service by 2035,” said Guillaume Faury. “The transition to hydrogen, as the primary power source for these concept planes, will require decisive action from the entire aviation ecosystem. Together with the support from government and industrial partners we can rise up to this challenge to scale-up renewable energy and hydrogen for the sustainable future of the aviation industry.”

In order to tackle these challenges, airports will require significant hydrogen transport and refueling infrastructure to meet the needs of day-to-day operations. Support from governments will be key to meet these ambitious objectives with increased funding for research & technology, digitalisation, and mechanisms that encourage the use of sustainable fuels and the renewal of aircraft fleets to allow airlines to retire older, less environmentally friendly aircraft earlier.

Note to editors: To evaluate and validate these new concept aircraft and assess whether they could be matured into viable future products, Airbus will be focusing its efforts on a number of technological pathways. Grazia Vittadini, Chief Technology Officer, Jean-Brice Dumont, EVP Engineering and Glenn Llewellyn, VP Head of Zero Emission Aircraft, will reveal Airbus’ technology roadmap for 2020-2025 at 14:00 CEST, 21 September 2020 during a virtual event on Airbus social media channels.

Airbus reports a EBIT €1.6 billion loss in the second quarter

Airbus issued this second quarter financial report:

  • Industrial system adjusted to new production levels, cash containment and business resizing on track
  • H1 financials reflect COVID-19 impact mitigated by adaptation measures 
  • Revenues € 18.9 billion; EBIT Adjusted € -0.9 billion, including € -0.9 billion COVID-19 related charges
  • EBIT (reported) € -1.6 billion; loss per share (reported) € -2.45
  • Free cash flow before M&A and customer financing € -12.4 billion, € -4.4 billion in Q2
  • Strong liquidity underpins business resilience and flexibility

 

Airbus SE reported consolidated financial results for the Half-Year (H1) ended June 30, 2020.

“The impact of the COVID-19 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.”

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 Space’s order intake increased to € 5.6 billion.

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 COVID-19 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(1)) 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 COVID-19 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 COVID-19 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 COVID-19.

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 European Union Aviation Safety Agency.

EBIT Adjusted at Airbus Defence and Space decreased to € 186 million (H1 2019: € 233 million), reflecting the COVID-19 impact, mainly in Space Systems, partly offset by cost reduction measures. The Division’s 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 aircraft’s 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(2) 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 January’s 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 flowwas € -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 Company’s Full-Year 2020 guidance was withdrawn in March. The impact of COVID-19 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.

 

Key post-closing events
In the frame of COVID-19, 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 SFO’s investigation related to contractual arrangements originating prior to GPT’s 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(3).

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(3).

 

Note to editors: Live Webcast of the Analyst Conference Call
At 08:15 CEST on 30 July 2020, you can listen to the H1 2020 Results Analyst Conference Call with Chief Executive Officer Guillaume Faury and Chief Financial Officer Dominik Asam via the Airbus website. The analyst call presentation can also be found on the company website. A recording will be made available in due course. For a reconciliation of Airbus’ KPIs to “reported IFRS” please refer to the analyst presentation.

 

Airbus Consolidated – Half-Year (H1) Results 2020

(Amounts in Euro)

Consolidated Airbus H1 2020 H1 2019 Change
Revenues, in millions

thereof defence, in millions

18,948

4,092

30,866

4,085

-39%

0%

EBIT Adjusted, in millions -945 2,529
EBIT (reported), in millions -1,559 2,093
Research & Development expenses, in millions 1,396 1,423 -2%
Net Income/Loss(2), in millions -1,919 1,197
Earnings/Loss Per Share  -2.45 1.54
Free Cash Flow (FCF), in millions -12,876 -4,116
Free Cash Flow before M&A, in millions -12,373 -3,998
Free Cash Flow before M&A and Customer Financing, in millions -12,440 -3,981
Consolidated Airbus 30 June 2020 31 Dec 2019 Change
Net Cash/Debt position, in millions -586 12,534
Employees 135,154 134,931 0%
By Business Segment Revenues EBIT (reported)
(Amounts in millions of Euro) H1 2020 H1 2019 (1) Change H1 2020 H1 2019 (1) Change
Airbus 12,533 24,043 -48% -1,808 2,006
Airbus Helicopters 2,333 2,371 -2% 152 124 +23%
Airbus Defence and Space 4,551 5,015 -9% 73 -15
Eliminations -469 -563 24 -22
Total 18,948 30,866 -39% -1,559 2,093
By Business Segment EBIT Adjusted
(Amounts in millions of Euro) H1 2020 H1 2019 (1) Change
Airbus -1,307 2,193
Airbus Helicopters 152 125 +22%
Airbus Defence and Space 186 233 -20%
Eliminations 24 -22
Total -945 2,529
By Business Segment Order Intake (net) Order Book
H1 2020 H1 2019 Change 30 June 2020 30 June 2019 Change
Airbus, in units 298 88 +239% 7,584 7,276 +4%
Airbus Helicopters, in units 75 123 -39% 666 697 -4%
Airbus Defence and Space, in millions of Euro 5,588 4,220 +32% N/A N/A N/A
Airbus Consolidated – Second Quarter (Q2) Results 2020

(Amounts in Euro)

Consolidated Airbus Q2 2020 Q2 2019 Change
Revenues, in millions 8,317 18,317 -55%
EBIT Adjusted, in millions -1,226 1,980
EBIT (reported), in millions -1,638 1,912
Net Income/Loss(2), in millions -1,438 1,157
Earnings/Loss Per Share (EPS) -1.84 1.49
By Business Segment Revenues EBIT (reported)
(Amounts in millions of Euro) Q2 2020 Q2 2019 (1) Change Q2 2020 Q2 2019 (1) Change
Airbus 4,964 14,346 -65% -1,865 1,687
Airbus Helicopters 1,131 1,364 -17% 99 115 -14%
Airbus Defence and Space 2,440 2,903 -16% 126 102 +24%
Eliminations -218 -296 2 8 -75%
Total 8,317 18,317 -55% -1,638 1,912
By Business Segment EBIT Adjusted
(Amounts in millions of Euro) Q2 2020 Q2 2019 (1) Change
Airbus -1,498 1,730
Airbus Helicopters 99 110 -10%
Airbus Defence and Space 171 132 +30%
Eliminations 2 8 -75%
Total -1,226 1,980

Q2 2020 revenues decreased by 55%, mainly driven by lower deliveries at Airbus and Airbus Helicopters, and lower revenues at Airbus Defence and Space.

Q2 2020 EBIT Adjusted of € -1,226 million reflected low commercial aircraft deliveries and COVID-19 related charges.

Q2 2020 EBIT (reported) of € -1,638 million included net Adjustments of € -412 million. Net Adjustments in the second quarter of 2019 amounted to € -68 million.

Q2 2020 Net Loss of € -1,438 million mainly reflected EBIT (reported) and the low effective tax rate.

 

 

EBIT (reported) / EBIT Adjusted Reconciliation

The table below reconciles EBIT (reported) with EBIT Adjusted.

Consolidated Airbus (Amounts in millions of Euro) H1 2020
EBIT (reported) -1,559
thereof:
A380 programme cost -332
$ PDP mismatch/balance sheet revaluation -165
Others -117
EBIT Adjusted -945

Airbus takes final step to end long-standing WTO dispute and U.S. tariffs

Airbus has agreed with the governments of France and Spain to make amendments to the A350 Repayable Launch Investment (RLI) contracts. After 16 years of litigation at the World Trade Organisation (WTO), this is the final step to stop the long-standing dispute and removes any justification for U.S. tariffs.

The tariffs imposed by the United States Trade Representative (USTR) are currently harming all targeted industry sectors, including U.S. airlines, and are adding to a very difficult environment as a consequence of the COVID-19 crisis. This is why Airbus has decided to make a final step to remove the last contentious point and amend the French and Spanish contracts to what the WTO considers the appropriate interest rate and risk assessment benchmarks. The WTO has already ruled that RLI is a valid instrument for governments to partner with industry by sharing investment risks. With this final move, Airbus considers itself in complete compliance with all WTO rulings.

“We have fully complied with all the WTO requirements. These additional amendments to the A350 RLIs demonstrate that Airbus has left no stone unturned to find a way towards a solution,” said Airbus CEO Guillaume Faury. “This is a clear signal of support to those who are suffering from the severe impact of the tariffs imposed by the USTR, especially at a time when industries are hard hit by the consequences of the COVID-19 crisis.”

Airbus concludes ATTOL with fully autonomous flight tests

Airbus made this announcement:

Following an extensive two-year flight test programme, Airbus has successfully concluded its Autonomous Taxi, Take-Off and Landing (ATTOL) project.

In completing this project, Airbus has achieved autonomous taxiing, take-off and landing of a commercial aircraft through fully automatic vision-based flight tests using on-board image recognition technology – a world-first in aviation.

In total, over 500 test flights were conducted. Approximately 450 of those flights were dedicated to gathering raw video data, to support and fine tune algorithms, while a series of six test flights, each one including five take-offs and landings per run, were used to test autonomous flight capabilities.

The ATTOL project was initiated by Airbus to explore how autonomous technologies, including the use of machine learning algorithms and automated tools for data labelling, processing and model generation, could help pilots focus less on aircraft operations and more on strategic decision-making and mission management. Airbus is now able to analyse the potential of these technologies for enhancing future aircraft operations, all the while improving aircraft safety, ensuring today’s unprecedented levels are maintained.

Airbus will continue research into the application of autonomous technologies alongside other innovations in areas such as materials, alternative propulsion systems and connectivity. By leveraging these opportunities, Airbus is opening up possibilities for creating new business models that will transform how aircraft are developed, manufactured, flown, powered and serviced.

The rapid development and demonstration of ATTOL’s capabilities was made possible due to a cross-divisional, cross-functional, global team comprising of Airbus engineering and technology teams, Airbus Defence and Space, Acubed (Project Wayfinder), Airbus China and ONERA under the leadership of Airbus UpNext.

The last Airbus A380 convoy passes through Levignac

The last convoy has passed through the town of Levignac, France  (near Toulouse).

The fuselage will become msn 272 for Emirates in mid 2021. It will be the last Airbus A380 built.

For 16 years the wings and fuselages arrived on the Atlantic coast and are then transported by barge inland and then via local roads from Langon to Toulouse, passing through the town of Levignac. The first convoy went through Levignac in 2004.

Copyright Photos: Eurospot.

Video:

Airbus threatens to sue its airline customers over undelivered aircraft

Airbus is threatening to sue some of its airline customers who are refusing to honor their contracts with undelivered aircraft according to Reuters.

Many airlines have been requesting to delay deliveries due to the sudden drop in passengers due to the COVID-19 crisis.

Airbus delivered 24 aircraft in May.

Read the full report.

Airbus officially opens its A220 production facility in the U.S.

Airbus has made this announcement:

A new chapter in the development of Airbus’ U.S. production capabilities has begun with inauguration of the completed A220 commercial aircraft final assembly line (FAL) in Mobile, Alabama.

This 270,000-square-foot facility – which can produce both the A220-100 and A220-300 versions – houses five primary assembly stations where major airframe component assemblies come together for a completed aircraft.

An A220 first for JetBlue

Airbus’ production team in Mobile, Alabama also marked another milestone, welcoming the first component assemblies destined to become an A220 for JetBlue. This low-cost carrier will be the second airline customer receiving U.S.-built A220s when the aircraft is delivered in late 2020.

“The team is excited to start working in their new facility and to welcome a new customer,” said Paul Gaskell, president of A220 USA and Head of A220 Program in Mobile. “It’s a strong endorsement from JetBlue in this challenging time.”

An expanded U.S. industrial footprint 

Airbus announced plans in October 2017 for the addition of A220 manufacturing at Mobile – which is situated on the edge of Mobile Bay along the Gulf of Mexico.

The company began producing A220s at Mobile in August 2019 using space in an existing Final Assembly Line hangar for U.S.-built A320 Family aircraft, and in newly-constructed support hangars. With the start of operations in the dedicated A220 final assembly line, Airbus’ production site in Alabama has now officially doubled in size.

“The expansion of our commercial aircraft production in Mobile – from the A320 Family to the A220 – further solidifies Airbus’ standing as a truly global aircraft manufacturer, and confirms that Airbus remains an important part of the American manufacturing landscape,” added Gaskell.

Mobile, Alabama is the second assembly site for the A220, which is Airbus’ latest addition to its product line of single-aisle commercial aircraft. The A220’s primary production facility and program headquarters are located in Mirabel, Canada, where dedicated functions – including engineering expertise and support functions – also are situated.

Airbus loses more than $500 million in the first quarter

Airbus SE reported consolidated financial results for its First Quarter (Q1) ended March 31, 2020.

“We saw a solid start to the year both commercially and industrially but we are quickly seeing the impact of the COVID-19 pandemic coming through in the numbers,” said Airbus Chief Executive Officer Guillaume Faury. “We are now in the midst of the gravest crisis the aerospace industry has ever known. We’re implementing a number of measures to ensure the future of Airbus. We kicked off early by bolstering available liquidity to support financial flexibility. We’re adapting commercial aircraft production rates in line with customer demand and concentrating on cash containment and our longer-term cost structure to ensure we can return to normal operations once the situation improves. At all times, the health and safety of Airbus’ employees is our top priority. Now we need to work as an industry to restore passenger confidence in air travel as we learn to coexist with this pandemic. We’re focused on the resilience of our company to ensure business continuity.”

Net commercial aircraft orders totalled 290 (Q1 2019: -58 aircraft) with the order backlog comprising 7,650 commercial aircraft as of 31 March 2020. Airbus Helicopters booked 54 net orders (Q1 2019: 66 units), including 21 H145s, 15 UH-72 Lakotas for the US Army and 2 Super Pumas. Airbus Defence and Space’s order intake of € 1.7 billion included military aircraft-related services, new contract wins in telecommunications and in connected intelligence. Also included is the Phase 1A demonstrator contract for Europe’s Future Combat Air Systems programme.

Consolidated revenues decreased to € 10.6 billion (Q1 2019: € 12.5 billion), reflecting the difficult market environment impacting the commercial aircraft business with 40 less deliveries than a year earlier, partly offset by a better mix and more favourable foreign exchange environment. A total of 122 commercial aircraft were delivered (Q1 2019: 162 aircraft), comprising 8 A220s, 96 A320 Family, 4 A330s and 14 A350s. Airbus Helicopters delivered 47 rotorcraft (Q1 2019: 46 units) with its 19% increase in revenues reflecting the favourable delivery mix and growth in services. Revenues at Airbus Defence and Space were stable    year-on-year. One A400M transport aircraft was delivered in the quarter.

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, restructurings or foreign exchange impacts as well as capital gains/losses from the disposal and acquisition of businesses – declined to  € 281 million (Q1 2019: € 549 million), mainly driven by Airbus.

Airbus’ EBIT Adjusted of € 191 million (Q1 2019: € 463 million(1)) mainly reflected the lower commercial aircraft deliveries and associated costs, partly offset by positive foreign exchange effects.

Airbus delivered further industrial progress in the first quarter, however around 60 aircraft could not be delivered due to the COVID-19 pandemic. As announced in early April, due to the COVID-19 situation average monthly aircraft production rates are being adjusted to 40 for the A320 Family, 2 for the A330 and 6 for the A350. This represents a reduction of roughly one third compared to pre-crisis average production rates. On the A220, the Final Assembly Line in Mirabel, Canada, is expected to progressively return to a monthly rate of 4 aircraft.

Airbus Helicopters’ EBIT Adjusted increased to € 53 million (Q1 2019: € 15 million), reflecting the favourable delivery mix and growth in its services business.

EBIT Adjusted at Airbus Defence and Space decreased to € 15 million (Q1 2019: € 101 million), reflecting the lower business performance, including in Space Systems. Due to the severity of the coronavirus pandemic, the incremental impact on the business is being assessed and the restructuring plan at Defence and Space will be adjusted accordingly.

Consolidated self-financed R&D expenses totalled € 663 million (Q1 2019: € 654 million).

Consolidated EBIT (reported) was € 79 million (Q1 2019: € 181 million), including Adjustments totalling a net € -202 million. These Adjustments comprised:

  • € -33 million related to A380 programme cost;
  • € -134 million related to the dollar pre-delivery payment mismatch and balance sheet revaluation;
  • € -35 million of other costs, including compliance costs.

The consolidated reported loss per share of € -0.61 (Q1 2019 earnings per share: € 0.05) includes the financial result of € -477 million (Q1 2019: € -43 million). The financial result includes a net € -245 million related to Dassault Aviation financial instruments and € -136 million from the full impairment of a loan to OneWeb, which filed for Chapter 11 bankruptcy proceedings in late March. The consolidated net loss(2) was € -481 million (Q1 2019 net income: € 40 million).

Consolidated free cash flow before M&A and customer financing amounted to € -8,030 million (Q1 2019: € -4,341 million) and included the payment of € -3.6 billion in penalties related to January 2020’s compliance agreement with the authorities. Despite the lower commercial aircraft deliveries and the significant inventory build-up, free cash flow before M&A and customer financing was at a similar level compared to the first quarter of 2019 when excluding the penalty payment. Consolidated free cash flow was € -8,501 million (Q1 2019: € -4,448 million).  The consolidated net cash position was € 3.6 billion on 31 March 2020 (year-end 2019: € 12.5 billion) with a gross cash position of € 18.4 billion (year-end 2019: € 22.7 billion).

Given the current COVID-19 environment, various measures were announced in late March 2020 to protect the Company’s financial liquidity and continue to fund its operations. These included securing a new credit facility amounting to € 15 billion, withdrawing the 2019 dividend proposal and suspending the voluntary top up in pension funding. In addition, a € 2.5 billion bond was issued, partially terming out the € 15 billion credit facility, and settled on 7 April 2020. In coming quarters, the Company will continue to focus on cash preservation and will be reducing cash outflows. Besides reducing expected 2020 capital expenditure by around € 700 million to around € 1.9 billion, the activated measures also include the deferral and suspension of activities which are not critical to business continuity and to meeting customer and compliance commitments.

The 2020 guidance was also withdrawn in March. The impact of COVID-19 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.

Airbus unveils a new aircraft “e-Delivery” process

Airbus has made this announcement:

A new aircraft hand-over and “e-Delivery” virtual process has recently commenced operation, guaranteeing continuation of Airbus’ delivery stream, while integrating the required health & safety requirements during the ongoing COVID-19 pandemic. The first customer to adopt the remote end-to-end process is Pegasus Airlines, which in the last few days received three brand new ‘e-delivered’ A320neo Family aircraft.

More airlines will follow likewise in the coming days and weeks. This new e-Delivery approach comprises three main stages: (a) Technical Acceptance Completion (TAC) tasks delegated to Airbus (or to a local third party appointed by the airline); (b) electronic Transfer-of-Title (electronic ToT); and (c) ferry-flight and subsequent reception of the aircraft at the customer’s base.

For the TAC (which is a prerequisite for ToT) the airline can delegate Airbus to perform, on its behalf, all the necessary actions. These include the ‘ground-check’, the acceptance test flight, acceptance manuals and procedures, as well as minor cosmetic rework if needed. Then for the ToT completion, Airbus’ and customers’ teams take benefit from a new secure collaborative platform: “e-SalesContracts”. This brings them all together – wherever they happen to be – into one real-time virtual environment where they can optimise and simplify all the contractual transactions, from the paperless drafting and commercially negotiating the delivery documents up to the remote ToT digital signature. This platform thus obviates the need for any of the customer’s own staff to be physically present at the Airbus Delivery Centre. After the TAC and ToT formalities are complete, the subsequent ferry-flight is also performed in a health-wise safe manner whereby the customer’s own flight crew (or an appointed third party) can pick-up the sanitised aircraft and fly it straight back from the delivery centre to the airline’s home base.

As well as affording a means of safe business continuity during the current COVID-19 crisis, the e-Delivery process, especially its new collaborative digital aspects – which confer enhanced workflow efficiencies, flexibility, transparency, plus a more environmentally-friendly and smoother overall customer experience – could become the blueprint for Airbus and its customers going forward.

Airbus reduces its production rate by one third

Airbus has made this announcement:

  • Business impacted by COVID-19 pandemic 
  • 21 net orders and 36 deliveries in March 2020
  • 290 net orders and 122 deliveries in Q1 2020
  • Production rates revised downwards adapting to new market environment

After a solid commercial and industrial performance at the beginning of the year, Airbus (stock exchange symbol: AIR) is now revising its production rates downwards to adapt to the new Coronavirus market environment.

In Q1 2020, Airbus booked 290 net commercial aircraft orders and delivered 122 aircraft.

A further 60 aircraft were produced during the quarter, highlighting the solid industrial performance, however they remain undelivered due to the evolving COVID-19 pandemic.

36 aircraft were delivered in March across the different aircraft families, down from 55 in February 2020. This reflects customer requests to defer deliveries, as well as other factors related to the ongoing COVID-19 pandemic.

The new average production rates going forward have been set as follows:

  • A320 to rate 40 per month
  • A330 to rate 2 per month
  • A350 to rate 6 per month

This represents a reduction of the pre-coronavirus average rates of roughly one third. With these new rates, Airbus preserves its ability to meet customer demand while protecting its ability to further adapt as the global market evolves.

Airbus is working in coordination with its social partners to define the most appropriate social measures to adapt to this new and evolving situation. Airbus is also addressing a short-term cash containment plan as well as its longer-term cost structure.

“The impact of this pandemic is unprecedented. At Airbus, protecting our people and supporting the fight against the virus are our chief priorities at this time. We are in constant dialogue with our customers and supply chain partners as we are all going through these difficult times together”, said Airbus Chief Executive Officer Guillaume Faury. “Our airline customers are heavily impacted by the COVID-19 crisis. We are actively adapting our production to their new situation and working on operational and financial mitigation measures to face reality.”

In its effort to support the fight against the COVID-19, Airbus has carried out extensive work in coordination with social partners to ensure the health and safety of its employees. This has been achieved by implementing new stringent work standards and processes. Airbus is contributing to the development, sourcing and ferrying of medical equipment, including facemasks and ventilators, in support of medical health services.