The difficulties in the satellite sector continue to weigh on Airbus’ results. And this clearly requires a strong response from the aircraft manufacturer.We are evaluating all strategic options regarding our space activity” said Guillaume Faury, CEO of Airbus. The leader spoke on the occasion of the publication of the group’s half-year results on July 30.
The satellite programs have indeed weighed down the aircraft manufacturer’s profitability with charges amounting to nearly 1 billion euros for the half-year. The group’s overall net income was halved, falling to 825 million euros, compared to 1.5 billion euros for the same period of the previous year, for a turnover that grew slightly to 28.8 billion euros. These charges could increase further because the analysis of the performance of space activities is not completely finished, particularly on one of the division’s major programs.
Be more selective about calls for tender
All scenarios are on the table to redress the situation: a restructuring, a review of the product portfolio, a new cooperation model as well as a merger and acquisition operation. Last June, the group had acknowledged that its difficulties affected the majority of its satellite programs, whether in the field of telecommunications, navigation or observation. The group must pay late penalties to its customers who do not deliver on time. It has struggled in particular to design new-generation satellites and has had to deal with failures by some of its suppliers.
According to its leader, Airbus will implement a more selective strategy before positioning itself or not on calls for tender. A new management team has been put in place with an action plan to restore competitiveness, contain costs and strengthen internal governance.
The group is also facing challenges in its commercial aircraft business, which have hurt its profitability. Its CFO Thomas Toepfer has mentioned R&D investments and the recruitment of experienced employees, which may have led to a situation of overstaffing.
Failure of major suppliers
The group is still suffering from the difficulties of its subcontractors in meeting the challenge of ramping up production. Surprisingly, SMEs are not the cause this time, but rather large established suppliers: its two engine manufacturers, Pratt&Whitney and CFM (an alliance between Safran and GE), but also its suppliers of seats, cabin components and landing gear.We are facing a limited number of difficulties which are due to some of our major suppliers.regrets Guillaume Faury. When parts are missing or arrive late on our assembly lines, typically engines, seats, landing gear, this has an impact on our deliveries.”
The group still delivered 323 aircraft this first half of the year. The aircraft manufacturer confirmed its ambition to deliver 770 commercial aircraft in 2024 and to reach a production of 75 A320 aircraft per month in 2027. Airbus has an order book of nearly 8,600 aircraft.
Source: www.usinenouvelle.com
