Airbus Announces Expansion, To Deliver 90 More Aircraft In 2019
In an annual press conference that took place February, European aircraft manufacturing giant Airbus announces plans to expand their aircraft from 800 planes in 2018 to 890 in 2019. The company targets 90 aircraft deliveries this year.
A Strong Full Year, Despite Challenges
“[The year] 2018 had plenty of challenges for us,” Airbus Chief Executive Officer Tom Enders admits during the press conference, He lists the lack of airline demand that led the company to wind down production of the A380 as one of their biggest setbacks last year.
Massive decrease in the number of orders coming from major airline companies including Emirates contributed to the cancellation of A380 production; the overall industry demand didn’t sit well with the aircraft, given the current trends. The A380 was a spacious jet that was popular with passengers, but the industry has recently begun to shift away from large aircraft in favor of small, wide-body jets.
Despite a challenging year, however, the company still managed to achieve a spike in the production of other commercial aircraft models. Airbus surprises everyone by picking up in Q4 and delivering record profitability, among other key performance indicators.
The company’s target of 90 more aircraft deliveries will all be accounted for in the commercial aircraft segment. Airbus’ 2018 guidance was delivered, mainly by the spike in commercial aircraft deliveries.
Last year’s net commercial aircraft orders totaled almost 750 and the order backlog reached a historical high at 7,577. The company’s earnings for this sector alone have doubled to $4.3 billion, with the increments leading the revenue to rise to nearly $48 Billion. These numbers indicate the underlying health of the market, and given the strength of last year’s performance, Airbus expects the trend to continue through 2019.
The company stands on a solid growth trajectory and looks to increase production to deliver promised orders. While reaching the expectation of delivering 890 aircraft orders is significant progress on their current back orders, it also signals that the company still has room for substantial year-over-year growth.
Airbus attributes its bottom-line growth to several aircraft models but announces that this year, the focus will be on its A220, A320, A330, and A350 models.
Steady Growth Trend, Expansions Underway
Over the past decade, Airbus has continuously outperformed the S&P 500 index. As recent progress and performance reports and announcements put the company in a favorable stance in front of the public, it was also able to roll out justified stock price increases.
During the press conference, the company also announced growth in their other segments such as helicopter, defense, and space. Enders concludes that businesses across all segments are in good shape. Airbus chief executive Tom Enders, is due to step down in April, but new management under Enders’ successor Guillaume Faury is preparing to take over.
Assuming there are no major disruptions, Airbus’ target of delivering up to 890 aircraft this year will reflect an 11% growth. This will help the company maintain its perch as one of the top manufacturers in the aerospace sector.