Airbus Posts Weaker Than Expected Q1 Operating Profit, Reaffirms 2024 Financial Goals
Airbus reported a first-quarter operating profit and cashflow lower than anticipated, partially due to increased staffing to prepare for rising demand. However, the aerospace giant reaffirmed its financial objectives for 2024 after facing initial challenges in the year regarding industrial costs.
Despite the shaky start, Airbus announced a higher output target for its wide-body A350 model, aiming to produce 12 aircraft per month by 2028 in response to a resurgence in demand for long-haul jets.
In specific figures, Airbus recorded an adjusted operating profit of 577 million euros ($618.37 million), marking a 25% decline from the previous year. Revenue stood at 12.83 billion euros, with a free cash outflow of 1.8 billion euros. Analysts, on average, had anticipated an operating profit of 789 million euros and a cash outflow of 1.3 billion euros.
The surge in demand for jets comes amid recovering air travel and concerns over a potential shortage of aircraft due to supply chain challenges. These include ongoing bottlenecks and maintenance delays that have grounded some existing planes, compounded by Boeing’s ongoing crisis.
Airbus CEO Guillaume Faury highlighted geopolitical and supply chain tensions, noting that the operating environment shows no signs of improvement.
In line with its expansion plans, Airbus is working towards its core industrial target of manufacturing 75 narrow-body A320neo-family planes per month by 2026, representing a roughly 50% increase from current levels, according to industry sources. This ramp-up necessitates upfront costs as Airbus prepares for the heightened production rate.
The packaged goods industry has been grappling with higher prices for over two years, passing on increased input costs to customers affected by the global health crisis and exacerbated by the conflict in Ukraine.
Despite challenges, Airbus remains focused on boosting production, with plans to increase output for its A350 wide-body jet to 12 per month by 2028, up from the current goal of 10 per month by 2026. Additionally, Airbus targets production of 4 A330 aircraft per month this year.
The uptick in wide-body sales follows a wave of retirements of older planes during the pandemic, coinciding with the end of a prolonged period of weakness for the industry’s large long-haul jets.
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Sources: AirGuide Business airguide.info, bing.com, reuters.com, afp.com