EADS Revises Guidance for Airbus Orders

 - August 5, 2013, 12:05 PM
On its third test flight, the A350 XWB performed a flyover of Le Bourget Airport during the Paris Air Show in June. (Photo: Airbus)

Encouraged by a bounty of sales commitments during the Paris Air Show, Airbus parent company EADS now predicts that the civil airframer will receive orders for 300 more aircraft than it previously projected for this year. While releasing its half-year financial results on July 31, EADS said it expects Airbus will receive orders for at least 1,000 airplanes and deliver between 600 and 610, up from last year’s 588.

The upward projections fittingly accompanied an announcement that EADS will rename itself the “Airbus Group” next year in acknowledgement of the dominant position its commercial aircraft business holds within the consortium. Airbus commercial aircraft sales accounted for nearly 70 percent of EADS group revenue during the first half of the year. Commercial aircraft revenues in the first six months of the year rose 8 percent, to €18.2 billion ($24 billion), on deliveries of 295 airplanes. During the same period last year it delivered 279. Meanwhile, first-half net orders accounted for 722 airplanes, more than three times the 230 it collected during the same period last year.

Moving into what EADS called a critical phase of the A350 program, Airbus continues to face schedule “challenges” associated with the project that could significantly affect costs, the company said. The company also continues to closely monitor schedule, performance and cost risks related to the industrial “ramp up,” said EADS. The A350 XWB completed its first flight at Airbus’s facility in Toulouse, France, on June 14, just before the opening of the Paris Air Show. The manufacturer has nearly finished building a second aircraft, MSN003, which it expects will join the flight-test program this fall. Airbus aims to introduce the A350 into service in the fall of next year and has already begun preparing its assembly operations. Three airlines–Air France KLM, Singapore Airlines and United Airlines–placed firm orders for 65 A350s during the show, raising the program’s total firm order count to 678 aircraft.

At Paris, Airbus signed firm orders for 241 aircraft, including 170 A320-series narrowbodies. Most of the narrowbody business came from the Lufthansa Group, which converted an earlier commitment for 70 A320/321neos and 30 Sharklet-equipped A320s to a firm order. Leasing company ILFC ordered 50 A320neos.

Airbus also signed an agreement with Germany-based Doric Lease for 20 A380 superjumbos during the airshow. A380 orders stand at 262, of which Airbus has delivered 105. EADS said it expects deliveries this year will lag behind the 30 A380s delivered last year. Based on first-half deliveries, the company anticipates €28 million ($37 million) in charges related to modifications of A380 wing rib feet to address cracking.

EADS valued the Airbus commercial backlog at the end of June at €575.7 billion ($762 billion) for 5,109 aircraft, rising from €505.3 billion ($668 billion) at the end of last year.