As of Sep 05th, 2021
Airbus is the largest aircraft manufacturer in Europe and competes with Boeing for the title of the largest aircraft manufacturer in the world. Airbus is a European multinational company with bases in the Netherlands, France, Germany, Spain and the United Kingdom. It also has several factories, engineering and support centres in different parts of the world. Previously, Airbus was a subsidiary of a large group called EADS and later became the giant Airbus Group, operating in areas such as commercial aviation, the defence industry, helicopters and the space industry. Boeing has more than 130,000 employees across 140 nationalities. Over the years, Airbus has delivered over 12,000 aircraft and over 12,000 helicopters.
Before the pandemic Airbus had experienced steady growth with its commercial aircraft, except for the giant A380 which was not as big a success as expected. Still, driven by the A320 family, Airbus always held a good market share in the fierce competition with its rival Boeing. In fact, Airbus even obtained an advantage when the newest Boeing aircraft, the 737-Max suffered two catastrophic accidents and had to ground the entire fleet 737-Max aircraft. Thus, it can be said that the aircraft deliveries in 2019 and even until 2020 were dominated mainly by Airbus despite it having a lower number of deliveries compared to Boeing in the previous years.
In 2019, Airbus had the highest number of aircraft delivered in its entire company’s history, mainly driven by deliveries of the A320neo family of planes. As you can see in the figure below, the growth that Airbus had been sustaining over the years was followed with an increase in deliveries and support for the delivery backlog.
Figure 1 – General Deliveries and Backlog Orders from Airbus
During the Pandemic
Despite being a large company, Airbus was expectedly affected by the pandemic. Airbus had its deliveries affected and had to reduce its workforce to reflect the reality that the pandemic brought to the aeronautical industry. The figures below show a drastic drop in new aircraft deliveries, but at the same time demonstrated the strength that a company of the size of Airbus had managed to make in a year that was terrible for aviation. Compared to the losses experienced by the airlines, it can be said that Airbus was not too badly affected. Most of its affected deliveries were during the middle of 2020 and after which, it saw an increase in the last quarter of 2020, with Asia as the main market that received new aircraft.
Figure 2 – Airbus Orders and Deliveries – 2020 Summary
As for its financial performance, Airbus recorded losses in Commercial Aviation during to the pandemic mainly due to the reduction in deliveries of new aircraft, as summarized in the figure below:
Figure 3 – Airbus Financial Year Results – 2020
When talking about the helicopters, the defense industry and the space market, Airbus saw profits in these areas as the impact of the pandemic in these sector were less felt. This was demonstrated by the fact that the revenues was reported in these segments, while commercial aviation reported only losses this year.
Figure 4 – Airbus Financial Year – 2020 – All Segments
When it comes to post-pandemic recovery, it is still far too early to predict anything. This is because no one knows for sure when the pandemic will end and given that the vaccines are not guaranteeing a more stable vision of the future due to the new variants of Covid-19. Even so, Airbus believes that commercial aviation should reach pre-Covid levels only between 2023 and 2025. However, Airbus has in fact already seen an improvement as early as 2021 when it managed to deliver almost 300 aircraft in the first half of 2021. This number of deliveries is 50% greater than compared to the same period in 2020.
Airbus in Asia
Asia is and will no doubt continue to be a growing market for Airbus. Currently, Asia represents around one-third of all of Airbus’s orders and revenue. Even in 2020 which was a bad year for aircraft deliveries, Airbus’s aircraft deliveries represented close to 26% of total deliveries to Asia.
Another interesting fact about the Asia region is that the backlog of aircraft to be delivered in this region was only slightly affected even with the ongoing pandemic. By the end of 2020, the Asia-Pacific region already had more than 4000 Airbus aircraft, operated by more than 100 operators, and it still has a backlog of more than 2000 aircraft deliveries. Asia is still the main market for the A380 for several more years, as it is operated by airlines such as ANA, Asiana Airlines, China Southern Airlines, Korean Air, Malaysia Airlines, Singapore Airlines, and Thai Airways.
In addition to planes, the Asia-Pacific region also currently has more than 2000 Airbus helicopters in operation, and Airbus holds an important military and space aircraft presence in this region.
Figure 5 – Airbus Deliveries in 2020 – Market Share per Region
Airbus already has had a presence in China with the production of the A320 family planes since 2006. Recently, in July 2021, with the help of several aviation companies in China producing different parts for them, Airbus managed to deliver the first Chinese-made A350 to China Eastern airlines.
Figure 3 – First A350 Manufactured in China
In addition to China, Airbus also has presence in several other Asian countries with some examples below:
• In India, Airbus has an engineering centre that does modelling and simulations for its programs, and it also has a training centre with simulators.
• South Korea is one of the locations with a few key parts suppliers to Airbus.
• Malaysia is also a location with important suppliers for Airbus, mainly in the supply of composite structures.
• Singapore is Airbus’ main business centre for its entire range of products and markets, in addition to having a training centre in partnership with Singapore Airlines.
• Indonesia, Japan, the Philippines, and other countries in the region also have major suppliers of parts to Airbus and its full range of products.
Airbus’ perspectives for the future
Up till July 2021, Airbus has had a total of 344 aircraft delivered, with June being the best month in 2021 where 77 aircraft were delivered. The total deliveries in 2021 indicate a significant recovery, especially when compared to the number of deliveries in 2020. The bulk of aircraft deliveries are still for narrow body aircraft, since the demand for larger long-range aircraft is still much lower than desired. A good part of these deliveries are taking place in Asia, mainly in China and with its domestic market adding new planes every month.
During the same period up till July 2021, Airbus received a total of 167 new orders, but also saw 134 order cancellations, with the vast majority these orders for the A320 family of planes. In July, Airbus only received 2 orders for the A320neo planes, the lowest number since January 2021, which also indicates that the airlines are not prepared yet to place new orders and remain very cautious about the future.
Airbus expects the aviation market to fully recover between 2023 and 2025, but in fact, Airbus has seen some improvement in 2021 and is expected to continue to improve slowly until pre-Covid levels. In May 2021, Airbus had already announced to its partners and suppliers an expected 10% production increase by the end of 2021 primarily for its family of single-aisle aircraft production line, and a lower production increase for its wide body aircraft.
Airbus, like any other aviation company has suffered great losses in 2020. However, it managed to adapt well to the new market demands and is prepared for the resumption of the aeronautical market. Due to the number of problems its main competitor, Boeing, has had to deal with over the past two years, Airbus’s current numbers prove that the future outlook for it is positive.