The number of Airbus deliveries in October is nearly at 2019 levels. Circumstantial or not, it’s a much-needed cash boost for the manufacturer. Airbus hopes to reduce the number of undelivered aircraft as much as possible, aiming to increase production by mid 2021.
The European manufacturer has had its fair share of challenges in the crisis. Airlines have refused deliveries of aircraft that they can’t put in service. Or worse, they won’t pick up aircraft because they are protecting their cash reserves. An understandable move, but it hampers Airbus’ own cash reserves.
In all, Airbus made 72 deliveries this month. Their backlog of aircraft awaiting delivery was 135. 43 aircraft were of the A320 family, another 12 were A220s and the rest were widebodies. Estimates suggest that the company’s undelivered inventory went down by 21 aircraft, split evenly between widebodies and the rest.
Airbus Deliveries Versus Production
We have previously seen Airbus’ notification to suppliers that it wants to raise its monthly output to 47 aircraft from July 2021. This raised a lot of eyebrows, for a number of reasons. Firstly, it assumes a Covid-19 recovery, perhaps in the form of wide-spread vaccinations, with the public returning to travelling.
Secondly, it assumes that the deliveries of existing completed airframes are nearly completed. For this to happen, the ‘all-clear’ from the pandemic (sigh) won’t be enough. Airlines will need time even beyond that, for their finances to recover. Here Airbus is banking on continuing deliveries to some airlines. WizzAir in Europe and other low-cost carriers in Asia have shown signs of making this possible, by picking up delivery slots from other airlines.
It’s not going to be that simple, however. Airbus’ deliveries today may be increasing, but deliveries to those Asian airlines remain at low levels. Still, October’s 72 deliveries are encouraging. And an alternative reading to the low Asian deliveries is that those are still expected, so the trend should continue.
On the competitive side, Airbus out-delivers and out-sells Boeing, and will continue to do so until the MAX flies. That shouldn’t be too far away now, the damage to sales for Boeing is done – for this year.
A lot will depend on extent and duration of the latest lockdowns around the globe and the subsequent recovery. Airbus and the airlines hope the Christmas season will somehow survive. They’re also looking closely at how governments will support their airlines and related industries. They know they can’t make deliveries of aircraft to airlines that can’t use them, or pay for them.
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