Airbus: Leading Innovation and Sustainable Air Travel

Airbus is a leader in designing, manufacturing and delivering aerospace products, services and solutions to customers on a worldwide scale.

As a well-established leader in the global aerospace sector, Airbus designs, produces and delivers innovative solutions with the goal to create a better-connected, safer and more prosperous world. With a comprehensive portfolio including commercial aircraft, space and defense as well as helicopters, Airbus is at the forefront of innovation, shaping the future of air travel and space exploration.

About Airbus

Airbus is the largest aeronautics and space company in Europe and a worldwide leader, competing directly with the American Boeing company. Airbus has expanded on its strong European heritage to become global – with approximately 180 locations and around 18,000 direct suppliers globally. The company’s aircraft and helicopter final assembly lines are strategically located across Asia, Europe and the Americas.

With a workforce of approximately 134,000employees, Airbus stands as the largest aeronautics and space company in Europe and a worldwide leader. Renowned for creating the most innovative commercial aircraft, the company consistently secures about half of all commercial airliner orders. Leveraging a deep understanding into changing market needs, customer focus and technological innovation, Airbus delivers products that connect people and places via air and space.

Airbus’ 2023 H1 results show strong demand

Airbus experienced a 16% increase in revenue from its commercial aircraft activities, mainly driven by a rise in the number of deliveries. In the first half (H1) of 2023, Airbus recorded an 11% total revenue increase year on year of €27.7bn ($30.5bn) compared to €24.8bn ($27.37bn) in H1 2022. So far, 2023 has demonstrated a period of high demand with a total of 1,080 gross commercial aircraft orders in H1 2023, significantly higher than the 442 aircraft in H1 2022. The company delivered a total of 316 aircraft in H1, comprising 25 A220s, 256 A320s, 14 A330s and 21 A350s. According to Airbus 2023 guidance, they have set targets of 720 commercial aircraft deliveries, an EBIT adjusted of €6bn and a free cash flow before M&A and customer financing of €3bn.

The French aircraft manufacturer achieved a record-high backlog of 7,967 commercial aircraft at the end of June 2023, particularly due to securing orders for over 800 aircraft across its product range at the Paris air show. CEO Guillaume Faury emphasized the company’s progress in 2023, with an extended demand due to the success of the Paris Air Show:

Airbus aims to increase production

Airbus aims to increase the manufacturing pace of the A220 program to 14 aircraft per month by the mid-2020s and target a monthly production rate of 65 aircraft for the A320 family program by the end of 2024. Before the end of 2025, plans also include establishing a second final assembly line for the A320 at its Chinese plant in Tianjin. This will support plans to produce 75 aircraft per month by 2026.

Will the targets be reached?

Meeting targets remains a challenge for Airbus. The company is still not on track to deliver 720 aircraft by the end of 2023, having already missed the 2022 goal.

The adjusted earnings before interest and taxes (EBIT), related to Airbus’ commercial aircraft activities, decreased to €580m compared to €1bn Q1 2022. Airbus stated that reduced deliveries, less favorable hedging rates and future planning expenditures all contributed to this decline. In light of this, Airbus helicopters’ adjusted EBIT increased to €156m, reflecting the performance across programs and a strong start in services. Lastly, the consolidated free cash flow before M&A and customer financing declined to €-889m compared to €213m in Q1 2022, mainly due to the necessary inventory build-up during the production ramp-up.

The Future of Travel in 2035

In May 2023, Airbus conducted a press conference unveiling their new vision for a more sustainable and decarbonized future of air travel, aiming to reshape the passenger experience. The focus was on the aircraft cabin, which research shows can contribute between 10-20% to the aircraft’s overall environmental impact during its lifecycle. The company is collaborating with ten major airlines, including the Lufthansa Group and Delta, alongside eight technology partners, to explore new concepts for future cabins. The goal is to design future cabins that minimize environmental damage while still delivering an improved traveler experience.

Airbus identified weight reduction as the most powerful lever in reducing the impact of the cabin. New cabin designs that are lighter may help to reduce their weight by up to 40%. For long-haul flights, passengers would be invited to pre-order their meals. Several airlines already offer these options, with some, such as Japan Airlines and Delta, allowing passengers to opt-out of a meal altogether. This advanced meal planning not only minimizes waste but also decreases the weight carried, thus reducing fuel costs.

Another interesting idea was that of shorter flights, giving passengers a pre-order choice that they collect before they board, further reducing weight with the need for less service trolleys. This will not only minimize food waste but also lighten the weight of the aircraft by up to 15%. Looking to the future, passengers should be provided with more transparent information into their individual journey’s carbon footprint. Leveraging technology, the company aims to offer more choices, such as carbon offsetting or meal choices.

Onboard, the integration of technology will allow passengers to operate everything using their personal smartphones. Virgin Atlantic recently launched its new Airbus 330neo cabin, giving passengers the ability to control the in-flight entertainment using their own device, even in economy class. Airbus envisions future cabins with nature-based designs with a sense of space and light. Yet, aircraft manufacturers often design these concepts while airlines aim to maximize seating capacity for greater profits.

There will also be a long-term focus on how aircraft cabin manufacturers can reuse materials, including parts made from recycled materials. This approach not only benefits the planet, but it could reduce production costs for new aircraft cabins. However, the initiatives to reduce weight would hold less environmental significance if sustainable fuel was used more. SAF (sustainable aviation fuel) is already being produced and has been used on numerous commercial flights. However, less fuel burn of any kind is always a way to reduce costs for airlines, no matter how small the weight difference. However, Qatar Airways CEO Akbar Al Baker recently commented about achieving the target of 65% sustainable airline fuel by 2050, casting doubt on the feasibility of sustainable aviation fuel production.

Conclusiones

Airbus’s innovative strides and commitment to sustainable air travel offer promising prospects for investors. As the company continues to focus on cutting-edge technologies, eco-friendly designs, and passenger-centric solutions, Airbus is well-positioned to meet increasing market demands. With a diverse portfolio and ongoing advancements in aerospace technology, Airbus has potential for long-term investment opportunities, particularly in the area of environmentally friendly aviation solutions. Investors keen on supporting forward-thinking initiatives and environmentally responsible practices may find Airbus an appealing avenue for investment in the dynamic and changing aerospace industry.

Exención de responsabilidad:
Esta información no se considera asesoramiento ni recomendación para invertir, sino que es una comunicación de marketing

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