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A220

Airbus Deliveries Drop in Half as Leaders Talk Negative Outlook on Aviation

Airbus Deliveries Drop in Half as Leaders Talk Negative Outlook on Aviation
Joe Cortez

French aircraft manufacturer Airbus said their number of deliveries dropped in half so far in 2020, due to the COVID-19 pandemic. With the manufacturer scaling back aircraft production, their leadership is among the voices now calling for slow growth within the industry.

Airbus reported a nearly $2 billion loss over the first six months of 2020, due in part to the Coronavirus outbreak and 50 percent fewer deliveries compared to 2019. The European aerospace giant reported the changes in their first-half financial report, released June 30, 2020.

Deflated Numbers and Deliveries Direct Response to COVID-19

The 196 aircraft deliveries were much lower than 2019, when the Toulouse-based company delivered 389 to customers. Leaders at Airbus blamed the decline in both earnings and deliveries on the current pandemic.

“The impact of the COVID-19 pandemic on our financials is now very visible in the second quarter, with H1 commercial aircraft deliveries halving compared to a year ago,” Airbus CEO Guillaume Faury said in a press release. “We have calibrated the business to face the new market environment on an industrial basis and the supply chain is now working in line with the new plan…We face a difficult situation with uncertainty ahead, but with the decisions we have taken, we believe we are adequately positioned to navigate these challenging times in our industry.”

Airbus is also planning to reduce productivity on their assembly lines, as the manufacturer tries to find a new normal beyond the pandemic. The company will produce five Airbus A350 aircraft, while the final assembly line for the A220 in Canada will slowly ramp up to pre-COVID levels. The reduced productivity is blamed partially on the company’s inability to deliver 145 finished commercial aircraft due to the pandemic.

The company is also working diligently to claw back U.S. tariffs on aircraft by working with the governments of France and Spain. Through making amendments to the A350 repayable launch investment contracts with each country, the company hopes to “to end the long-standing World Trade Organisation (WTO) dispute and remove any justification for US tariffs.”

Airbus Equally Negative on Aviation Industry Recovery

With the contraction from the COVID-19 pandemic, Airbus is joining a number of voices saying the commercial aviation industry may not recover for several years. In June 2020, the Associated Press reported Airbus would lay off 15,000 employees, on the outlook that airline passenger traffic may not recover until 2025.

Their outlook joins those of Moody’s Investor Services and the International Air Transport Association, calling for a longer timeline for passengers to return to the skies. Both the IATA and aviation unions are asking Washington to do more to control the COVID-19 pandemic to accelerate the aviation industry recovery.

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