Airbus Steps Up A320 Production Again Despite A350 Charge
On the day that Airbus sent two more A350 development aircraft on their maiden voyages, bringing the test fleet to four, Airbus Group announced during its 2013 annual results press conference that the delayed program had incurred a €434 million charge. During the February 26 conference, group CFO Harald Wilhelm said charges totaled €900 million ($1.23 billion), including another €300 million ($410 million) provision following the ongoing restructuring of the group’s defense and space division.
Appearing with Wilhelm in Toulouse, Airbus Group CEO Tom Enders said that, despite the setbacks, profits rose by 22 percent and earnings before interest, tax and one-off items rose to €3.6 billion ($5 billion), exceeding the €3.5 billion ($4.8 billion) forecast. Sales rose by 5 percent to €59.3 billion ($81.1 billion), and the value of the order book now stands at €687 billion ($939.1 billion), 32 percent of which resides in the Asia Pacific region.
He also announced that earnings would continue to increase, driven in part by a just-announced increase in narrowbody aircraft production rate, now expected to move to 46 per month in 2016 from the present level of 42. Narrowbodies accounted for the bulk of the record delivery number of 626 last year, while the company sold 1,619 more aircraft in the year, reported Enders. The A350 now has drawn orders for 814 units from 39 customers. Nevertheless, Airbus executives described the program as “challenging,” admitting the possibility of future charges, both from the A350XWB and “foreign exchange effects.”
Enders said that 2013 proved to be a “year of tremendous change – in governance, strategy and branding” and he described 2014 as a transition year, with a similar number of deliveries compared with last year but higher revenue attributable to an increase in A380 shipments. “This year the focus is on execution [not change] – execution of strategy and of programs,” he said, “first and foremost on the A350, the A400M [military airlifter] and the EC175 [helicopter].” In addition he confirmed that the A320neo remains “on track” for first flight in September.