Despite a slower than anticipated recovery in the air transport sector, Airbus said on October 29 that it is making progress in efforts to stabilize its balance sheet in the wake of continuing disruption from the Covid-19 pandemic. Announcing results for the first nine months of 2020, the European aerospace group said it has made progress in stabilizing cash flow during the third quarter.
Consolidated revenues for the nine months ending on September 30 were 35 percent down on the same period in 2019 at €30.2 billion ($35.5 billion), driven mainly by a decline of around 40 percent in commercial aircraft deliveries. Consolidated EBIT adjusted earnings across the group showed a €125 million ($146.3 million) loss.
During the first three quarters, Airbus delivered 341 airliners (compared with 571 in the same period in 2019). By the end of September, the number of aircraft that could not be delivered specifically due to the Covid crisis had been reduced to 135, resulting in 145 deliveries being made over the third quarter (of which 57 were made during September). Deliveries in the nine-month period reflected the relative weakness of demand for long-haul flights, with more single-aisle aircraft leaving Airbus factories, including 18 A220s, 282 members of the A320 family, nine A330s, and 32 A350s.
The new orders for 300 airliners recorded during the first three quarters of 2020 represented a 136 percent increase on the 127 booked during the same period last year. Taking account of order cancellations, this resulted in a backlog of 7,441 commercial aircraft, which was 4 percent higher than at the end of the third quarter last year.
The group’s Airbus Helicopters division saw revenues decline by 2 percent to €3.6 billion ($4.2 billion). However, EBIT adjusted earnings for this unit grew by almost 14 percent to €238 million ($278 million).
During the first three quarters of 2020, Airbus Helicopters booked 143 new orders for civil and military aircraft, which was 17 percent less than in 2019, and included eight of the H160 medium utility model and one example of the H215 large twin during the third quarter.
Over the first nine months of 2020, Airbus delivered 169 rotorcraft, which was 19 percent fewer than in the same period last year. However, the decline in revenue was somewhat mitigated by increased billings from services. During the third quarter, the company delivered the first of its new five-blade H145 light twin, following its completion of EASA type certification during the second quarter.
Airbus’s Defense and Space unit recorded an 11 percent dip in revenues to €2.39 billion ($2.8 billion). This resulted in EBIT adjusted earnings of €80 million ($93.5 million), which were just over one third down on the same period last year.
“After nine months of 2020 we now see the progress made on adapting our business to the new Covid-19 market environment,” said Airbus CEO Guillaume Faury. “Despite the slower air travel recovery than anticipated, we converged commercial aircraft production and deliveries in the third quarter and stopped cash consumption in line with our ambition.”
Faury said that discussions with trade unions and other stakeholders have progressed well as it continues efforts to stabilize costs and cash flow. Barring any worsening in disruption to the world economy and the air transport sector, Airbus anticipates achieving breakeven in cash flow for the fourth quarter of this year.