After a solid commercial and industrial performance at the beginning of the year, Airbus (stock exchange symbol: AIR) is now revising its production rates downwards to adapt to the new Coronavirus market environment. In Q1 2020, Airbus booked 290 net commercial aircraft orders and delivered 122 aircraft.
A further 60 aircraft were produced during the quarter, highlighting the solid industrial performance, however they remain undelivered due to the evolving COVID-19 pandemic. 36 aircraft were delivered in March across the different aircraft families, down from 55 in February 2020. This reflects customer requests to defer deliveries, as well as other factors related to the ongoing COVID-19 pandemic.
The new average production rates going forward have been set as follows:
A320 to rate 40 per month
A330 to rate 2 per month
A350 to rate 6 per month
This represents a reduction of the pre-coronavirus average rates of roughly one third. With these new rates, Airbus preserves its ability to meet customer demand while protecting its ability to further adapt as the global market evolves.
Airbus is working in coordination with its social partners to define the most appropriate social measures to adapt to this new and evolving situation. Airbus is also addressing a short-term cash containment plan as well as its longer-term cost structure.
“The impact of this pandemic is unprecedented. At Airbus, protecting our people and supporting the fight against the virus are our chief priorities at this time. We are in constant dialogue with our customers and supply chain partners as we are all going through these difficult times together”, said Airbus Chief Executive Officer Guillaume Faury. “Our airline customers are heavily impacted by the COVID-19 crisis. We are actively adapting our production to their new situation and working on operational and financial mitigation measures to face reality.”
In its effort to support the fight against the COVID-19, Airbus has carried out extensive work in coordination with social partners to ensure the health and safety of its employees. This has been achieved by implementing new stringent work standards and processes. Airbus is contributing to the development, sourcing and ferrying of medical equipment, including facemasks and ventilators, in support of medical health services.
The month in review: March 2020
Airbus logged net orders in March for 21 commercial aircraft (60 gross orders) from its A320 and A350 XWB product lines. During the month, 36 deliveries were made from the A220, A320, A330 and A350 XWB aircraft families. New single-aisle business was led by a purchase finalisation by AerCap for 50 A320neo Family aircraft, involving 25 A320neo and 25 A321neo versions.
March’s widebody order involved an A350 XWB acquisition of 10 A350-900s by one undisclosed customer. By 31 March, before cancellations, Airbus’ gross orders in 2020 totalled 356 aircraft. Business in March brings the overall total orders logged by Airbus since its creation to 20,398 commercial aircraft, which includes 15,563 A320 Family aircraft, 1,819 A330s, 930 A350 XWBs, 642 A220s and 251 A380s.
In March, 30 A320 Family aircraft (composed of 29 NEO versions and one in the CEO configuration); plus two A220s, were delivered. For Airbus widebody aircraft, three A350 XWBs were provided in the A350-900 configuration; along with one A330ceo. Among the month’s notable deliveries was the first A320neo delivered to Drukair, Bhutan’s national carrier. AIR BUSAN, the low-cost subsidiary of South Korea’s Asiana Airlines, received its first A321LR and became the first operator of the type in East Asia.
Airbus’ backlog of aircraft remaining to be delivered as of 31 March stood at 7,650, comprised of 6,220 A320 Family aircraft, 529 A220s, 323 A330s, 569 A350 XWBs and nine A380s.