Tuesday, October 31, 2017

Airbus looks to 700 deliveries by year-end; A320neos to fall short

Airbus Commercial Aircraft recorded an EBIT (adjusted) of €591 million ($697.4 million) in the third quarter of 2017, up 4.2% compared to €567 million in 3Q 2016.

The Toulouse-based manufacturer said that while the A350 industrial ramp-up continues to make progress—with the program on track to meet its monthly production rate of 10 aircraft by the end of 2018—the A320neo family ramp-up continues to prove challenging following engine delivery issues through the year.

As of Sept. 30, Airbus had delivered 454 commercial aircraft year to-date—350 single-aisle A320 family aircraft, 45 A330 family aircraft, 50 A350 XWBs and nine A380s. In its full-year 2017 guidance, Airbus said it expects to deliver more than 700 commercial aircraft, “which depends on engine manufacturers meeting commitments.”

In its third-quarter financial statement issued Oct. 31, Airbus noted that at the beginning of the year the company had projected deliveries of nearly 200 A320neo family aircraft for full-year 2017. As of Sept. 30, 90 A320neo family aircraft had been delivered (82 A320neos and eight A321neos) to 19 customers. Airbus acknowledged its A320neo deliveries “are now expected to be slightly below that target … [attributable] to engine availability issues and allocation between the OEM and spare pools.” The A320neo family backlog, as of Sept. 30, stands at 5,202 aircraft—3,673 A320neos, 1,478 A321neos and 51 A319neos.

“[Our] strong backlog and a healthy market environment continue to support our commercial aircraft production ramp-up plans,” Airbus CEO Tom Enders said. “We confirm our outlook even though this year’s delivery schedule is extremely back-loaded, largely due to the well-known engine problems plaguing our A320neo family.”

Pratt & Whitney’s PW1100G geared turbofan (GTF) engine competes with CFM International’s LEAP-1A as the power source on Airbus’ A320neo family aircraft. In April, Pratt began a fleet-wide retrofit of its PW1100G GTF engines, installing a more durable air seal designed to combat issues known to be linked to 28 premature engine removals.

Third-quarter revenue for the Commercial Aircraft division was €10.9 billion, up 3.9% on the 3Q 2016 figure of €10.5 billion.

Net profit figures were given only for the overall Airbus Group, which includes military aircraft, helicopters and space activities. For the 2017 third quarter, Airbus’ net income totaled €348 million, a nearly sevenfold increase over €50 million in total net income for the 2016 September quarter, “mainly driven by positive foreign exchange effects,” Airbus said. The company’s total adjusted EBIT for the quarter was €697 million, down 4.4% year-over-year (YOY), “reflecting a stable performance at Commercial Aircraft as the unfavorable delivery and phasing impact, transition pricing and ramp-up costs were offset by R&D tailwind and progress on the A350 industrial ramp-up.”

The company offered a full-year 2017 guidance of mid-single-digit percentage growth—before mergers and acquisition—in adjusted EBIT. As of nine months into 2017, the company’s adjusted EBIT stands at €1.8 billion, down 25.4% compared to €2.4 billion for the same period last year.

As the basis for its 2017 guidance, Airbus said it expected the world economy and air traffic to grow in line with prevailing independent forecasts, which assume no major disruptions.

For the first nine months of 2017, Airbus received 271 net commercial aircraft orders, compared to 380 in the same period last year. 2017’s order intake to Sept. 30 totaled €50.8 billion, compared to €73.2 billion for the same period in 2016. The company’s total commercial aircraft order backlog comprised 6,691 aircraft at the end of September.

(Mark Nensel - ATWOnline News)

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