The two largest airplane makers in the world, Airbus and Boeing announced their Q1-CY20 results today. As anticipated both the manufacturers have declared losses as the world battled COVID-19 and air travel is one the most impacted industries worldwide.
Airbus reported revenues of EUR 10.6 billion and a consolidated net loss of EUR 481 million for the first quarter of 2020.
Boeing reported revenues of USD 16.9 billion of which USD 6.2 billion came from commercial aircraft division. The company reported a net loss of USD 641 million. Boeing recently announced termination of its proposed joint venture with Embraer.
Airbus Chief Executive Officer Guillaume Faury termed this crisis as “the gravest crisis the aerospace industry has ever known”. Boeing will lay-off 10% of its workforce.
Airbus clocked 290 orders in Q1 and has a backlog of 7,650 aircraft as of 31st March 2020. The company delivered 122 aircraft in Q1 which comprised of 8 A220s, 96 A320 family, 4 A330s and 14 A350s. Boeing delivered 50 airplanes in Q1, 29 of which were the B787s.
Cutting production rates
Airbus had announced in early August that it would adjust its monthly production rate of A320 family to 40 per month, 2 for the A330 and 6 for the A350. This is one-third reduction compared to pre-COVID-19 levels. The A220 production line at Mirabel, Canada is expected to return to 4 aircraft per month, soon.
Boeing expects the production rate of B737 MAX aircraft to return to 31 per month gradually in 2021. The aircraft has been grounded after two fatal crashes and Boeing had stooped manufacturing of the MAX this January as it grappled for parking space. Production rate of the B787 Dreamliner will be reduced from 14 to 10 in 2020 and gradually reduced to 7 per month by 2022. The B777 and yet to be certified B777X combined will see a reduction of production rate to 3 per month in 2021.
Both the manufacturers are working out ways to conserve cash and match production and demand. They also need to work with airlines to manage their order backlog and ensure that airlines sustain.
Airbus and Boeing are slowly getting some of their production facilities back to operation and most are with lower number of workforce than the usual. A few countries, including India in lockdown – even aircraft which are ready for delivery cannot go ahead and will have an adverse impact on both Airbus and Boeing in Q2 with the impact being much larger than Q1. Spicejet has orders with Boeing for the B737 MAX and Vistara is expecting its second B787-9 while IndiGo, GoAir and Vistara have the A320 family on order and awaiting deliveries.