Following the news that Airbus SE reported strong financials for FY 2021;
Tushar Sudesh Mangure, Defense Analyst at GlobalData, a leading data and analytics company, offers his view:
“Airbus seems to have successfully navigated through the COVID-19 pandemic as it attracted higher deliveries and a significant increase in new orders which helped boost the performance of its commercial aircraft and helicopters businesses. The share of revenue from its commercial business improved marginally from 67% in 2020 to 69% in 2021. Even though the revenue of its defense and space business declined by 2.5% in 2021, its share in the company’s overall revenue increased from 15% in 2019 to 19% in 2021.
“The company’s recovery has also been supported by the successful execution of internal performance plans, including cost reduction and productivity efforts. The efforts enabled the company to significantly reduce its manufacturing cost and operating expenses, thereby increasing its EBIT Adjusted to €3,570 million in 2021 from €618 million reported in 2020.
“Airbus’ new orders (net) stood at 507 units for 2021 in comparison to 268 units recorded in 2020, thereby witnessing an astounding Year-on-Year (YoY) growth of 89.2%. The company’s new order intake value for 2021 was €40,004 million compared to €16,089 million in 2020, a huge increase of 148.6%.
“Post pandemic economic recovery in developed countries of North America and Europe is assumed to have emerged as a key factor in improving the company’s new order revenue during 2021. In 2021 North America and Europe cumulatively accounted for approximately 57% of the order book value in comparison to 51% reported for 2020. Asia Pacific’s order book value share declined from 29% in 2020 to 26% in 2021. Even though Asia Pacific share declined in relation to 2020, Airbus expects significant growth in the region owing to increase in passenger traffic in emerging economies such as India, Vietnam, and Indonesia, among others.
“The passenger aircraft segment is expected to reach $168.1 billion by 2031, growing at a CAGR of 1.86% respectively, according to GlobalData*. The replacement of ageing aircraft by major airlines to decrease the operational cost, reduce downtime, and increase profitability is anticipated to drive the segment growth over the forecast period. In comparison to the older narrow body aircrafts, the newer widebody variants offer higher fuel efficiency and are considerably cheaper to operate.
“Due to the immense improvements in the company’s business fundamentals and assuming no further global economic disruptions and restrictions on air traffic activity due to COVID-19 pandemic, we expect the company to maintain similar performance for 2022.”
*Data taken from GlobalData’s Commercial Fixed Wing Market Forecast 2021-2031
