COVID-19 Has Cost Airbus €1 Billion So Far

Airbus has today released its third-quarter financial results. Like all companies across the aviation industry, the European plane manufacturer has been impacted by the COVID-19 pandemic. Specifically, the sudden lack of demand for new commercial aircraft. The company said that it had incurred €1 billion of COVID-19 related charges.

Airbus, COVID-19, Deliveries
Airbus has so far spent €1 billion on COVID-19 related costs. Photo: Getty Images

Yesterday Boeing revealed that it had lost almost $3.5 billion so far this year. It has only delivered 98 in the first nine months of the year compared to 568 in 2018. According to its earnings call, Airbus sees a similar downturn from its commercial arm as deliveries get deferred. Many airlines wonder why they should take new aircraft when they do not fly the aircraft they already have.

Air travel is recovering slower than expected

Airbus was very aware back in March of the potential impacts of the COVID-19 pandemic. As such, it withdrew its full-year guidance for 2020. However, the company today revealed that global air travel was recovering slower than had been anticipated.

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Commenting on the situation, Airbus CEO Guillaume Faury said,

“After nine months of 2020 we now see the progress made on adapting our business to the new COVID-19 market environment. Despite the slower air travel recovery than anticipated, we converged commercial aircraft production and deliveries in the third quarter and we stopped cash consumption in line with our ambition.”

British Airways, Airbus A350, G-XWBG
British Airways has continued to take delivery of its Airbus A350 orders. Photo: Tom Boon – Simple Flying

135 undelivered aircraft

According to Airbus, it has been unable to deliver 135 aircraft due to the COVID-19 pandemic by the end of September. This was down on the figure earlier in the year thanks to some recent deliveries.

Airbus stated that it delivered 145 aircraft in the third quarter of 2020, more than Boeing’s entire year so far. This means that so far, in 2020, Airbus has delivered 341 aircraft. The delivered aircraft comprised 300 narrowbodies and 41 widebodies.

Recently, many airlines have been looking to defer their aircraft deliveries. Firstly, the majority of an aircraft’s cost is paid at delivery. Pushing deliveries pushes the payment commitment. However, many airlines are also not operating their full fleets. It may not make sense for them to increase their fleet size right now.

Airbus, COVID-19, Deliveries
The airline delivered more narrowbody aircraft than widebodies. Photo: Airbus

Despite this, deliveries are still taking place. British Airways has continued to take delivery of its Airbus A350-1000 orders. Meanwhile, Turkish Airlines took its first A350s last week. Delta Air Lines joined in by taking a new Airbus A220 every day of this week. Meanwhile, TAP Air Portugal recently took delivery of its retrojet.

Airbus clocked slightly fewer aircraft orders than aircraft delivered for the nine months. This year, 300 Airbus aircraft have been ordered, with 127 of these orders from July to September. This means that the European manufacturer now has a backlog of 7,441 undelivered aircraft as of September 30th.

What do you make of Airbus’ current situation? Let us know what you think and why in the comments!