The air transport crisis is far from over. Air traffic remains affected by the spread of variants and travel restrictions. This is evidenced by the International Air Transport Association (Iata) global traffic figures for June, down 40% compared to 2019. This is also evidenced by the forecasts of ADP which does not expect to regain its pre-crisis traffic before 2027.
However, the aeronautics industry is beginning to recover some colors in financial terms, due not only to the drastic cost-cutting measures taken since the beginning of the crisis but also to the resumption of aircraft deliveries to airlines, which has generated additional revenue. As a reminder, most of the bill for an aircraft is paid at the time of delivery. The engine manufacturer and aeronautical equipment supplier Safran has indeed indicated Wednesday perceive “a beginning of recovery”.
Airbus expects operating profit of 4 billion euros in 2021
On Thursday, Airbus hit hard with strong results and “muscular” forecasts. The group reported an operating profit of 2.7 billion euros in the first half of the year, due to a strong increase in deliveries compared to last year (297 aircraft between January and June compared to 196 in the same period in 2020), driving sales up 30% to 24.6 billion euros.
Thanks to these “solid performances”,” we are therefore able to raise our 2021 forecasts, despite the still unpredictable context”, says Executive chairman Guillaume Faury, quoted in a statement.
While it had so far expected to deliver as many aircraft this year as last year (566 aircraft), the group now expects 600 deliveries. As a result, the financial forecasts were also revised upwards. Airbus also expects to achieve an adjusted operating profit of 4 billion euros, double its previous target. Investors appreciated. The stock price gained more than 4% in the morning.
Boeing finally profit after six quarters of losses
For its part, Boeing is starting to go up the slope. Doubly penalized by the pandemic and by the setbacks encountered by several programs (the 737 MAX, but also the B787) the group returned to the green in the second quarter after six quarters of losses. The US automaker posted a net profit of $ 587 million from April to June, compared with a loss of $ 2.4 billion in the same period last year. Its revenue grew by 44% to $ 17 billion. Results that made the stock price jump more than 4% on Wednesday. Boeing can indeed again count on the deliveries of 737 MAX, grounded for twenty months following two fatal accidents before being gradually allowed to fly back around the world since the end of 2020. The manufacturer delivered 130 copies. But 787 deliveries still remain at a standstill.
However, the commercial aviation division remains loss-making. So it is still the defense, space and security division that allows Boeing to make money. On the strength of this improvement, the management decided not to cut more posts and to remain at around 140,000 employees. As a reminder, the American aircraft manufacturer had initially planned to reduce its total workforce to 130,000 employees at the end of 2021, against 160,000 at the beginning of 2020.
“Beginning of recovery”, notes Safran
The French Safran group, for its part, recorded a net profit of 674 million euros in the first six months of the year. Its revenue, adjusted for accounting effects related to foreign exchange hedging, was € 6.9 billion, down 21.6% compared to the first half of 2020. For its managing director Olivier Andriès, “the results of the first half of 2021 remain affected by the effects of the crisis and an unfavorable basis of comparison in the first quarter”. “They also point to a start of recovery in the second quarter,” he adds. Safran has indeed noted that the flight cycles of its most recent engine, the LEAP equipping the Airbus A320neo and Boeing 737 MAX, had returned mid-July to their level of 2019 while they were only at 56% at the end of April. The use of CFM56 engines, equipping older and therefore more fuel-intensive aircraft, also increased but remained down 35% compared to 2019.
Expecting a” significant acceleration of activity in the second half of the year”, Safran confirms its outlook for 2021, forecasting a fall in adjusted revenue of” 2 to 4%”, excluding the effects of foreign exchange and scope.
These services, highly remunerative for the engine manufacturer, depend on air traffic: aircraft fly more, companies need more spare parts and maintenance services. The propulsion business, which provides almost half of the group’s revenues, fell by 19.7% in the first half, as did the Aeronautical equipment, defence and aerosystems division (-18.3%) and that of aircraft interiors-seats, cabins, on – board entertainment – (-39.7%). The latter activity has “probably reached its low point”, believes Safran