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Airbus Ramps Up Services and Production

The aircraft manufacturer grew sales of its services unit in the first half of 2019.

Airbus’s commercial aircraft business posted about €1.7 billion ($1.8 billion) of aftermarket sales in the first half of the year, which equated to roughly 7% of total revenue.

While that was a lower share than in the year-ago period, Airbus did manage to grow its total services sales by roughly €200 million.

The lower percentage contribution was down to a big escalation of Airbus production through 2019, which by June 30 has seen the company deliver 389 aircraft, versus 303 in the prior-year period.

Despite speculation that production niggles at its Hamburg plant would cause Airbus to miss its delivery goal for the year, the OEM has reiterated its target of 880-890 deliveries for the full year.

However, Airbus chief executive officer Guillaume Faury acknowledged that the “second half of the year in terms of deliveries and in particular free cash flow continues to be challenging”.

No doubt Boeing would take its challenging year over Airbus’s, for just as production of the A320neo is ramping up, the grounding of the 737 Max continues with no clear end in sight.

The importance of both aircraft to their respective manufacturers was illustrated in their first half results: Airbus saw it pre-tax profit climb 170% on higher output of the A320 family, for which the A320neo accounted for 234 out of 294 narrowbodies; Boeing booked an almost $5 billion charge for disruption related to the Max grounding and associated delivery delays.

At least Boeing can take some comfort from its services sales, which were roughly $9 billion in the first half. That compares with roughly $4.7 million (€4.2 million) for Airbus if one combines its commercial, helicopter and military services sales (as Boeing Global Services does).

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