Airbus resists pandemic with a net loss of 1.1 billion euros

Airbus, Europe's leading aircraft manufacturer and along with Boeing one of the world's largest, suffered significant losses in 2020 although it managed to limit the damage caused by the pandemic that collapsed the aviation sector. The European manufacturer published on Thursday a net loss of 1.1 billion euros in 2020, a much better figure than that recorded by its US competitor, which, weighed down by the failures of the 737 MAX model and delays in the first deliveries of the 777X until the end of 2023, suffered a loss of 11.9 billion dollars. 

Even so, Airbus' net loss is lower than in 2019 ($1.4 billion), a year that was marked by a €3.6 billion fine when it reached a settlement with France, the UK and the US to end allegations of corruption and bribery by authorities in those countries over a series of payments the company allegedly made to intermediaries in several countries to secure the sale of commercial aircraft.  

The fall in global air traffic due to travel restrictions has resulted in Airbus seeing its turnover fall by 29% to 49.912 billion euros. They delivered 566 aircraft in 2020, a third less than the previous year, so they do not expect an immediate rebound in the market and expect to deliver as many aircraft in 2021 as last year.  

"The 2020 results demonstrate the resilience of Airbus in the most challenging crisis to hit the aerospace industry," said chief executive Guillaume Faury. "Many uncertainties remain for our industry in 2021 as the pandemic continues to impact lives, economies and societies," Faury said.

The manufacturer cut its production rate in the spring by 40 per cent. However, it plans to increase its A320 aircraft production this year from 40 per month to 45 by the fourth quarter of 2021. Before the pandemic, it produced 63 a month.  

The fall was very limited in the defence and space business (-4% to 10.446 billion euros) and in helicopters turnover increased by 4% to 6.251 billion, which has compensated for commercial aviation revenues plunging by 37% to 34.250 billion euros.  

To adapt to the new economic situation, the company announced in June that it was cutting 15,000 jobs, 5,000 in France and 5,100 in Germany, out of the 134,000 jobs the group had at the time. Although it is currently ruling out further job cuts.  

What the company has warned is that this year it will not distribute dividends due to the "global business environment". With this, they are seeking to strengthen the company's financial situation by avoiding the outflow of cash.  

The depreciation of the dollar (the currency in which virtually all industry transactions are made) against the euro and the fact that new aircraft orders in 2020 were far lower than deliveries are reflected in the value Airbus places on its order backlog, which on 31 December was 373 billion, compared to 471 billion a year earlier.  

The target for the current year is to deliver the same number of commercial aircraft as in 2020 and a net result of €2 billion, up from €1.706 billion last year, but still well below the €6.946 billion in 2019.