Abu Dhabi, UAEFriday 6 December 2019

Airbus profits soar 72% on new single-aisle jets

Europe's largest aerospace group beat forecasts as second-quarter adjusted operating profit rose to €1.98 billion

An Airbus A220 on the final assembly line. The company is on course to be the world's largest plane maker in 2019. Reuters
An Airbus A220 on the final assembly line. The company is on course to be the world's largest plane maker in 2019. Reuters

Airbus on Wednesday posted stronger than expected core second-quarter earnings, led by the switch to efficient new single-aisle jets, and maintained its profit forecast for the year while warning of delivery challenges in the second half.

Europe's largest aerospace group said second-quarter adjusted operating profit rose 72 per cent to €1.98 billion (Dh8.11), led by a more than twofold rise at the main Airbus commercial plane making arm. Revenues rose 23 per cent to €18.32bn.

Analysts were on average forecasting adjusted quarterly operating income of €1.77bn on revenues of €17.82b, according to a company-compiled consensus.

Airbus is trying to overcome industrial delays at a newly expanded plant in Hamburg, Germany, which is responsible for enhanced cabins for the in-demand A321neo, the largest version of the plane maker's best-selling single-aisle family.

Airbus said it was looking at options to increase the share of the A321neo in the wider A320neo family.

"The second half of the year in terms of deliveries and in particular free cash flow continues to be challenging," said chief executive Guillaume Faury.

Airbus is nonetheless on course to be the world's largest planemaker in 2019 as US rival Boeing faces a longer-than-expected grounding of its 737 Max, ordered by worldwide regulators in March in the wake of two fatal accidents.

Boeing last week posted its largest-ever quarterly loss due to the grounding crisis.

Airbus took €75 million in new charges in the second quarter related to the cost of winding down its A380 superjumbo programme after deciding to scrap output due to weak demand.

Air France-KLM on Tuesday announced plans to retire the world's largest jetliner to concentrate on smaller models like the A350, which Airbus said was on track to break even this year after "good progress" in reducing costs.

Airbus took €90m in other charges including compliance costs as it pursues a four-year-old investigation into the use of middlemen in aircraft and other sales. It said in its accounting notes that it was too early to assess liability for potential fines or other lawsuits.

The European company warned formally for the first time of damage to deliveries and finances if the United States goes ahead with plans to imposes tariffs on European planes as part of a long-running transatlantic trade dispute over subsidies.

Airbus said it continued to support a negotiated solution.

Updated: July 31, 2019 10:02 AM

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