Airbus Profit Hit By Delivery Problems

Airbus made a EUR€1.5 billion net profit in the first half, a drop of 15 percent from the previous year period.

Total revenue of €28.7 billion was a shade down on 1H16, but adjusted earnings before interest and tax (EBIT) fell 35 percent to €1.1 billion.

Airbus said it was making good process in the production ramp up of the A350, with 30 delivered in the half year, from 12 in 1H16.

The A320neo ramp up is not going as well, with problems on the Pratt & Whitney geared turbofan engines continuing to affect deliveries.

Airbus said Pratt “has introduced some fixes but these improvements have not come through yet on a reliable basis under normal service conditions.”

In contrast, aircraft ordered with the alternative CFM International LEAP engines are being delivered on schedule.

The ambitious target of close to 200 A320neo deliveries in 2017 is more challenging given the engine issues, Airbus said.

Looking forward, the airframer said it expects “the world economy and air traffic to grow in line with prevailing independent forecasts, which assume no major disruptions.”

Airbus expects to deliver over 700 aircraft this year, but that depends on engine manufacturers meeting their commitments.