PARIS (Reuters) – European planemaker Airbus axed its dividend for a second yr and forecast flat deliveries in 2021 as it braces for more coronavirus uncertainty within the wake of an annual loss.
The company’s decision to revive key business targets is the latest evidence of a tentative return towards normal after the pandemic, which has severely hurt air travel.
Rival Boeing has but to set out detailed targets, having been mired in a separate crisis over the grounding of its 737 MAX, which helped Airbus to reclaim the title of the largest global jet maker.
However, several analysts warned that the deliberately cautious delivery forecast from Airbus jarred with the company’s more optimistic plans on production. These call for a partial recovery later this yr, albeit more slowly than first planned.
The danger, they mentioned, is that this would add to a surplus of almost 100 planes parked outside Airbus factories.
Chief Executive Guillaume Faury mentioned the forecast for “at least” 566 jet deliveries, unchanged from the last yr when production had fallen 40%, gave investors some visibility. The actual level will depend on demand from airlines, he added.
Most analysts had predicted more than 600 deliveries, allowing Airbus to reduce the stockpile.
“We remain cautious about the pace at which the airline industry can rebuild its balance sheet to the point the place aircraft demand rises significantly,” Jefferies analyst Sandy Morris wrote.
Faury defended the decision to target fewer deliveries than a number of planes in its production schedule, saying its planners are torn between a worsening short-term situation and the prospect of vaccine-driven demand improvements later this yr.
However, Airbus indicated {that a} tipping level at which people begin to travel again and airlines take more jets is a matter of when not if.
In a sign of the strain on airline finances, Airbus sliced 100 billion euros ($120.5 billion), or 20%, off the value of its order book to 373 billion euros.
Whereas the coronavirus crisis has raised doubts over the ability of some airways to honor contracts, Airbus mentioned the decrease also reflected lower orders and a weakening dollar.
Airbus posted a 2020 operating loss of 510 million euros, weighed down by charges booked in previous quarters, notably for restructuring and the closure of the loss-making A380 program.
On a widely watched adjusted basis, operating profit fell 75% to 1.7 billion euros as revenue slumped by 29% to 49.9 billion euros.
For 2021, Airbus predicted an adjusted operating profit of 2 billion euros.
Stronger than anticipated jet deliveries within the fourth quarter helped Airbus to generate 4.9 billion euros in cash flow before M&A and customer financing, beating its quarterly break-even target.
Airbus also drew a line under past efforts to spin off aerostructures units in France and Germany and prepare them for sale. Industry sources say few buyers came forward and Faury mentioned such actions were again deemed “core” – especially as Airbus ponders the complex, clean designs of the future.
He mentioned it’s too early to say whether the 2009 carve-out would be reversed, a move that typically removes management layers.
Airbus is about halfway through cutting 15,000 staff in its biggest-ever restructuring.
