AIRBUS - 2020 Universal Registration Document
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations / 2.1 Operating and Financial Review
In the fourth quarter 2019, an update of the contract estimate at completion was performed and an additional charge of € 1,212 million recorded. This re ected mainly the updated estimates on the export scenario during the launch contract phase based on a revision of the market perspectives taking into account the current environment, including the suspension of the export licenses by the German Government and its consequences on potential prospects. It re ected as well some cost increases in particular for retrofit and an updated view on applicable escalation. As of 31 December 2020, the Company has delivered a total of 97 A400M aircraft including nine aircraft in 2020. The COVID-19 pandemic is weighing on the performance of development, production, ight testing, aircraft delivery and retrofit activities. The Company continued with development activities toward achieving the revised capability roadmap. Retrofit activities are progressing in close alignment with the customer. In 2020, an update of the contract estimate at completion confirmed the 2019 position. A charge of € 63 million has been recorded in 2020 re ecting mainly the variation of price escalation indexes. Risks remain on the development of technical capabilities and associated costs, on aircraft operational reliability in particular with regard to power plant, on cost reductions and on securing export orders in time as per the revised baseline. A320 programme . In 2018, A320neo Fami ly del iver ies increased to 386 aircraft and represented over 60% of overall A320 Fami ly del iveries during 2018. The f irst long-range A321LR was delivered in the fourth quarter. In 2019, NEO aircraft deliveries rose by 43% year-on-year to 551 aircraft. The ramp-up continued for the Airbus Cabin Flex (“ACF”) version of the A321 with almost 100 more deliveries than in 2018. The Airbus teams were focused on securing the ongoing ACF ramp-up and improving the industrial ow. At that time, Airbus discussed further ramp-up potential for the A320 programme beyond rate 63 per month with the supply chain, and saw a clear path to further increase the monthly production rate by one or two for each of the two years after 2021. On 8 April 2020, the Company announced its decision to adapt commercial aircraft production rates to 40 per month for the A320 Family in response to the new COVID-19 market environment. In 2020, Airbus delivered 431 A320neo Family aircraft. On A320, production rates are foreseen to gradually increase from 40 aircraft per month currently to 43 in the third quarter and 45 in the fourth quarter 2021. A330 programme . In 2018, 49 A330 were delivered. On the A330neo programme, the first A330-900s were delivered and the A330-800 conducted its maiden ight in the final quarter of 2018. In 2019, 53 A330 were delivered. Given overall customer demand for widebody aircraft, Airbus expected A330 deliveries of approximately 40 aircraft per year beginning in 2020 (prior to the outbreak of COVID-19). On 8 April 2020, the Company announced its decision to reduce commercial aircraft production rates to around two per month for A330 in response to the new COVID-19 market environment. In 2020, 19 A330 were delivered.
A350 XWB programme. In 2018, Airbus delivered 93 A350 XWB aircraft. In 2019, Airbus delivered 112 A350 XWB aircraft. New order intakes, cancellations, delivery postponements and other contractual agreements to the end of December 2019 were re ected in the Financial Statements. Risks continued to be closely monitored in line with the schedule, aircraft performance and overall cost envelope, as per customer commitments. Despi te the progress made, chal lenges remained wi th recurring cost convergence. The breakeven target for the A350 was achieved in 2019. Given overall customer demand for widebody aircraft, Airbus expected A350 deliveries to stay between a monthly rate of nine and ten aircraft. On 8 April 2020, the Company announced its decision to adapt commercial aircraft production rates to six per month for A350 in response to the new COVID-19 market environment. Subsequently, the rate for A350 was further reduced to around five per month. In 2020, Airbus delivered 59 A350 XWB aircraft. In 2020, given the significant production rate reduction, the A350 programme did not reach breakeven with 59 A350 XWB deliveries. A400M programme. Progress on the A400M programme resulted in the recognition of revenues of € 2.1 billion in 2018, € 1.5 billion in 2019 and € 1.6 billion in 2020. In 2018, 17 A400M aircraf t were delivered. The Company worked together with OCCAR and concluded the negotiations on a contract amendment. In the fourth quarter 2018, an update of the contract estimate at completion triggered a net additional charge of € 436 million. This re ected the outcome of the negotiations, updated estimates on the export scenario during the launch contract phase of the A400M programme as well as applicable escalation and some cost increases. The contract amendment was successful ly completed in June 2019, after each nation finalised their domestic approval processes. This new contract de-risked the programme and provided the Company, OCCAR and customers greater visibility, which supported future planning and preparedness. Yet, despite the progress, the A400M programme was not entirely risk free. Risks remained on development of technical capabilities and the associated costs, on securing sufficient expor t orders in time, on aircraf t operational rel iabi l ity in particular with regards to engines, and on cost reductions as per the revised baseline. In 2019, 14 A400M aircraf t were del ivered. In total, the Company had delivered a total of 88 A400M aircraft as of 31 December 2019. On 13 June 2019, the Company concluded together with OCCAR and the Nations the negotiations on a global re- baselining of the programme. A contract amendment was signed by all parties, providing a revised aircraf t delivery schedule, an updated technical capability roadmap and a revised retrofit schedule. Important certification milestones were achieved in 2019, in particular on critical Paratrooper Simultaneous Dispatch and Helicopter Air to Air refuelling capabilities. Technical modifications corresponding to the New Standard Operating Clearance (NSOC2) contractual standard were cer tif ied and qual if ied. However, NSOC2 Type Acceptance initially planned in 2019 was still pending due to ongoing discussions on some operational limitations.
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Airbus / Registration Document 2020
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