Airbus posts 55% jump in second-quarter profit on higher commercial jet deliveries

World’s biggest plane maker says it is on track for its target to build 75 of its best-selling A320 jets a month by 2026

Airbus says it is 'progressing well' towards the 75-per-moth production goal for its A320 Neo-family of jets in 2026. AP

Airbus recorded a 55 per cent gain in second-quarter profit, propelled by higher jet deliveries during the period, as airlines grow and replace their fleets to meet the boom in demand for air travel.

The world's biggest plane maker's net profit for the three months to the end of June climbed to €1.06 billion ($1.18 billion) from the same period a year earlier, as revenue rose, Airbus said in a statement on Thursday.

Revenue in the three-month period increased 25 per cent year on year to €15.9 billion, boosted by an increase in jet deliveries to customers.

Airbus's adjusted earnings before interest and tax rose 34 per cent on an annual basis to €1.845 billion.

"Our commercial aircraft are in strong demand, as demonstrated by more than 800 orders announced at the Paris Air Show. This demand is driven both by growth and fleet replacement as airlines invest in more fuel-efficient fleets,” Airbus chief executive Guillaume Faury said.

The operational environment remains complex, he added.

The aviation industry has been grappling with ongoing disruptions in its supply chain since the Covid-19 pandemic, resulting in rising costs, delivery delays and production snags.

Engine-maker Pratt & Whitney, a unit of Raytheon Technologies (RTX) and the main competitor to CFM, on July 25 ordered inspections on 1,200 engines of Airbus A320 Neo jets after a problem with contaminated powdered metal.

"Pratt & Whitney has determined that a rare condition in powder metal used to manufacture certain engine parts will require accelerated fleet inspection. This does not impact engines currently being produced," RTX said in a statement.

"As a result, the business anticipates that a significant portion of the PW1100G-JM engine fleet, which powers the A320 Neo, will require accelerated removals and inspections within the next nine to 12 months, including approximately 200 accelerated removals by mid-September of this year. The business is working to minimise operational impacts and support its customers."

Airbus's first-half net profit fell 20 per cent year on year to €1.5 billion. This is despite revenue for the period rising 11 per cent to €27.7 billion, as the Toulouse-based company delivered 316 commercial aircraft.

These comprised 25 A220s, 256 A320-family jets, 14 A330s and 21 A350 wide-bodies.

Gross commercial aircraft orders totalled 1,080, up from 442 aircraft in the first half of 2022.

The net orders of 1,044 aircraft after cancellations were up from the 259 net orders recorded in the first half of last year.

The total order backlog amounted to a record 7,967 commercial aircraft at the end of June 2023, according to Airbus.

Airbus Helicopters registered 131 net orders (first half 2022: 163 units) which were well spread across programmes and included 19 H160s.

Airbus Defence and Space’s order intake by value was €6 billion (first half 2022: €6.5 billion), including four new-build and five converted A330 multi role tanker transport aircraft for Canada.

In terms of its production, Airbus said it is on track to reach its goal of building 75 of its best-selling A320 jets a month by 2026. However, it dropped a goal to hit a monthly quota of 65 by the end of 2024.

"On the A320-family programme, production is progressing well towards the previously announced rate of 75 aircraft per month in 2026," Airbus said.

"Tactical adjustments to production planning will continue to be made as required to meet this target rate, which is now the key reference point for the company and the supply chain."

On the A321XLR, the newest and largest narrowbody airliner, the flight test programme is progressing towards expected entry into service in the second quarter of 2024, Airbus said.

On wide-body aircraft, the company continues to target a monthly production rate of four A330s in 2024 and a monthly rate of nine A350s at the end of 2025, Airbus said.

Looking ahead, the European plane maker reaffirmed its delivery target of 720 planes this year. It also forecast adjusted earnings before interest and tax of €6 billion for 2023. It expects free cash flow before some items to drop to €3 billion in 2023 from €4.7 billion.