A321neo FAL fuselage moving to Station 40 scaled
Airbus is no longer publicly sharing monthly or quarterly production rates for its A320neo family. Instead, it will disclose only a yearly number, but the main target is that of building 75 aircraft by 2026. CEO Guillaume Faury no longer sees a point in sharing interim numbers, he said today during the HY1 earnings call. Airbus no longer sharing quarterly production rates.
During the FY22 and Q1 2023 calls, Faury still provided the rates. For instance, he said that the A320neo family would be around rate fifty per month this year and get to 65 aircraft per month by the end of 2024. Today, he was unwilling to disclose the current rate, nor say when rate 65 will be reached. Instead, “rate 75 is the target reference point we want to reach,” Faury said.
During the media call, Faury explained: “We are not withdrawing our target (of rate 65) because we aren’t reaching it. You have to remember that we referred to rate 65 as when will we be back to pre-pandemic levels. We were close to rate 65 just before Covid. We have worked with this back-to-pre-Covid number as a target, but now we have moved so much from that reference with going from eight final assembly lines, of which four were A321-capable, to ten that are all A321-capable, that rate 65 is no longer comparable with that of 2019.”
“We now have all Airbus forces and the supply chain concentrates on the ramp-up to rate 75. There is no change to the plan, we deliver on our numbers in HY1. But I don’t want to comment each and every month or quarter on the rate. I don’t believe this is something really meaningful. We give guidance for the year. We are on a trajectory for our guidance, so we are on our way to increasing our rate up to rate 75.”
Faury shared previously reported medium-term production rates for commercial aircraft. The A220 will go to rate fourteen per month by the middle of the decade, the A330 to rate four in 2024, and the A350 to rate nine by the end of 2025.
HY1 results
Airbus reported a consolidated net profit for Q2 of €1.060 billion compared to €682 million last year. Revenues totaled €15.9 billion versus €12.810 billion. EBIT Adjusted was €1.845 billion versus €1.382 billion, EBIT Reported €1.497 billion versus €1.150 billion.
Consolidated results for HY1 are a net profit of €1.526 billion, down from €1.901 billion in the same period of 2022. Revenues were higher to €27.663 billion from €24.810 billion. EBIT Adjusted was €2.618 billion, slightly down on the €2.645 billion in HY 2022.
EBIT Reported was €1.887 billion compared to €2.579 billion. This includes a €651 million dollar pre-delivery mismatch and balance sheet revaluation, €34 million for the transformation of Aerostructures, and €46 million in compliance costs. The result also reflects lower results at Airbus Defence and Space, which reported a fifty percent drop in EBIT Adjusted to €78 million.
Free cash flow before M&A and customer financing for HY1 was €1.574 billion, down from €1.955 billion. Net cash stood at €9.064 billion compared to €9.431 billion, and gross debt at €13.9 billion. Airbus still has an €8.0 billion credit facility at its disposal.
Commercial Aviation
In Q2, Commercial Aircraft generated 36 percent higher revenues at €12.239 billion from €8.992 billion. EBIT Adjusted was €1.676 billion versus €1.211 billion, EBIT Reported was €1.326 billion versus €1.236 billion.
For HY1, revenues were €20.349 billion (2022: €17.533 billion), with EBIT Adjusted reaching €2.256 billion versus €2.276 billion last year and an EBIT Reported of €1.523 billion compared to €2.478 billion. Thanks to 800 orders at the Paris Airshow, Airbus ended HY1 with 1.080 gross and 1.044 net orders.
Airbus reiterates its guidance for 720 aircraft deliveries, although it delivered 316 in HY1 and has another 400 to go. Faury is confident that the gradual ramp-up of production this year will make this possible, although the supply chain remains challenging and still has many bottlenecks.
No direct impact from the latest GTF issue
One of them is the situation with the Pratt & Whitney Geared Turbofan. On Tuesday, P&W parent RTX said that it will accelerate the inspection of 200 engines on A320neo aircraft until September and likely another 1.000 in the coming months. The engine maker wants to be sure that a contamination issue with powder metal used for high-pressure turbine disks is not causing any safety issues. RTX Chairman Greg Hayes said that the issue affects parts produced between Q4 2015 and early 2021, but Faury mentioned ‘Q3 of 2021’ in the Airbus call.
The direct impact on Airbus of this issue will be limited, said Faury. “We are not expecting disruptions for 2023. There is no direct impact on shipments of engines from P&W to Airbus and from Airbus to our customers. But it will be a lot of work for Pratt & Whitney and us to set up the MRO capacity and organize all the work to take the engines back, open them and do the inspections. It will be a challenge and there might be an indirect consequence linked to the additional work that is present.”
He is aware that the issue can cause severe disruptions to GTF operators and acknowledged it will cause a lot of frustration to customers to be confronted with this latest issue. Faury added it is too early to comment on any potential effects on 2024 or even 2025 production.
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