Airbus reports record profits, shuts down A380
Airbus reported a big jump in EBIT for 2018 as it announced the decision to wind down production of the A380.
Airbus reported a 83% jump in EBIT Adjusted for the full year 2018, at €5.8bn, on revenues of €63.7bn (+8%). The EBIT figure does not include provisions of €463m relating to the shutdown of the A380 programme and €436m on the A400M military transport. Consolidated EBIT was reported at just over $5bn, an 89% improvement from the previous year, which had already seen net profits increase almost three-fold.
The major announcement was the decision to wind down production of the A380 programme, “due to lack of airline demand”. The move reflects a decision by Emirates to reduce its A380 orderbook by 39 aircraft with 14 A380s remaining in the backlog yet to be delivered to the carrier. Accordingly, deliveries of the A380 will cease in 2021.
On the A400M programme, 17 aircraft were delivered during the year, two fewer than in 2017. Outgoing CEO Tom Enders spoke of “significant de-risking” of the programme in 2018. According to Airbus, the additional charge of €436m mainly reflects the outcome of contractual negotiations and updated estimates on the export scenario, escalation and some cost increases.
The company was careful to underline that risks remain on the development of technical capabilities and the associated costs, on securing sufficient export orders in time, on aircraft operational reliability in particular with regards to engines, and on cost reductions as per the revised baseline.
For the year ahead, Airbus is targeting 880-890 commercial aircraft deliveries. On that basis, it expects to deliver an increase in EBIT Adjusted of approximately +15%.