Airbus Profit Drops On A400M Charge

Airbus net income for the full year 2016 dropped 63 percent to EUR€995 million (USD$1.05 billion) as it took a €2.2 billion charge on the A400M military transporter.

Total group revenue came in at €66.58 billion, a 3 percent increase from 2015’s €64.45 billion. The commercial aircraft division saw a 7 percent boost in revenue to €49.24 billion, but Defence and Space dropped 9 percent, and helicopters were down 2 percent on the previous year.

Commercial aircraft provided a 20 percent jump in revenue in the fourth quarter to €17.73 billion as a backlog of aircraft deliveries was partly cleared.

Defence and Space had a slow end to the year with a 12 percent drop in revenue to €4.14 billion, down 12 percent on the same quarter in 2015. In Q4, Airbus took a €1.2 billion charge on the A400M military transporter, bringing the full year total to €2.2 billion.

“We have delivered on the commitments that we gave a year ago and achieved our guidance and objectives, with one exception, the A400M, where we had to take another significant charge totalling €2.2 billion in 2016,” Airbus chief executive Tom Enders said.

“De-risking the programme and strengthening programme execution are our top priorities for this aircraft in 2017,” he added.

The troubled A400M transport aircraft has suffered from propeller and engine gearbox problems, causing delays and cost overruns. The first aircraft was delivered to the French Air Force in 2013 and is now in service with several European air forces. Airbus delivered 17 A400Ms during the year.

Commercial aircraft deliveries in 2016 reached 688, up from 635 a year earlier. Net commercial aircraft orders rose to 731, from 1,080, including 41 A350s and 83 A330s. A320-family deliveries reached 545, including 68 A320neos

The total value of the group's order book was €1,060 billion at the end of December, up from €1,006 billion in 2015.