Airbus doubles profit and raises plane delivery outlook as travel demand recovers

The European plane maker plans to launch a cargo version of its A350 wide-body aircraft

Airbus plans to deliver more than 600 aircraft this year with plans to launch an A350 freighter. AP

Airbus doubled its profit forecast for the year and aims to deliver more than 600 aircraft in 2021, with plans to launch an A350 freighter as global demand for jets picks up and travel rebounds from the coronavirus pandemic.

The company raised its forecast for earnings before interest and tax for the full year to €4 billion ($4.75bn) from an earlier target of €2bn, the European plane maker said in a statement on Thursday.

The company swung to an operating profit of €2.01bn in the second quarter from a loss of €1.23bn a year earlier, as revenue rose 70 per cent to €14.18bn.

In the first half of the year, Airbus recorded an operating net profit of €2.7bn, compared with a loss of €945m in the same period in 2020 when international travel came to a near standstill because of the pandemic. Revenues increased 30 per cent year-on-year in the first half to €24.6bn.

Airbus’ shares rose 4.9 per cent to €119.4 at 9.12am in Paris on Thursday

“Although the Covid-19 pandemic continues, the numerous actions taken by the teams have delivered a strong H1 [first-half] performance. This enables us to raise our 2021 guidance although we continue to face an unpredictable environment,” Guillaume Faury, Airbus’ chief executive, said.

The company delivered 297 aircraft in the first six months of the year compared with 196 in the same period in 2020, when lockdowns disrupted production. Airbus said it now expects to deliver 600 planes this year as against the previously estimated 566 planes.

Toulouse, France-based Airbus said while the aviation industry is showing signs of recovery, the uneven global vaccination rates and the spreading Delta variant casts uncertainty over the industry's revival.

Giving impetus to its growth will be an addition to the Airbus family, a wide-body freighter A350 aircraft, which Airbus plans to roll out by 2025.

“Following board approval, we are enhancing our product line with an A350 freighter derivative, responding to customer feedback for increased competition and efficiency in this market segment,” Mr Faury said.

The A350 freighter will be pitched against the US rival Boeing’s B767 and B777 cargo planes.

The pandemic has hit the aviation sector particularly hard, but demand is beginning to recover due to the increased pace of vaccine distribution in many countries.

Aviation watchdog, the International Air Transport Association, expects the outlook for global airlines to improve during the second half of the year, possibly resulting in an increase in aircraft deliveries.

Total air passenger numbers in 2021 will be 52 per cent lower than they were in 2019, before bouncing back in 2022 to 88 per cent of their pre-crisis levels and exceeding pre-pandemic levels (105 per cent) in 2023, Iata said in a recent statement.