AIRBUS - 2020 Universal Registration Document

Risk Factors / 2 Business-Related Risks

In 2020, the Company delivered 566 commercial aircraft, 34% fewer than in 2019, in line with the Company’s adaptation plan. This re ects customer requests to defer deliveries as well as other factors related to the ongoing COVID-19 crisis. In 2020, the Company recorded 115 cancellations. Through the end of February 2021, the Company delivered 53 commercial aircraft and recorded 92 cancellations in 2021. On 21 January 2021, the Company announced it is updating its production rate planning for its A320 Family aircraft in response to the market environment. The new average production rates for the A320 Family will now lead to a gradual increase in production from the current rate of 40 per month to 43 in Q3 and 45 in Q4 2021. This latest production plan represents a slower ramp up than the previously anticipated 47 aircraft per month from July 2021. The A220 monthly production rate will increase from four to five aircraft per month from the end of Q1 2021 as previously foreseen. Widebody production is expected to remain stable at current levels, with monthly production rates of around five and two for the A350 and A330, respectively. This decision postponed a potential rate increase for the A350 to a later stage. The Company continues tomonitor the market closely. With these revised rates, the Company preserves its ability to meet customer demand while protecting its ability to further adapt as the global market evolves. The Company expects the commercial aircraft market to return to pre-COVID levels by 2023 to 2025. The Company is monitoring the evolution of the COVID-19 crisis and will continue to evaluate further impacts and additional measures going forward while taking into account the latest industry outlook. Although the full impact of the COVID-19 pandemic and the resulting health and economic crisis cannot reasonably be assessed at this time given its uncertain duration and extent, the Company’s business, its operations and supply chain are likely to be further disrupted by new variants and successive waves of the pandemic, the uncertainty it creates and the resulting health and economic crisis. The Company’s business, results of operations and financial condition have been and will continue to be materially affected by the COVID-19 pandemic, and the Company continues to face significant risks and uncertainties related to new variants and successive waves of the COVID-19 pandemic and its resulting health and economic crisis. For further details, please refer to the “– Notes to the IFRS Consolidated Financial Statements – Note 2: Impact of the COVID-19 Pandemic”.

In addition to its impact on the financial viability of operators, airlines and lessors and the reduction of commercial air traffic, lockdowns, travel limitations and restrictions around the world have posed logistical challenges and may cause disruptions to the Company’s business, its operations and supply chain. These measures have and may continue to adversely affect the Company’s ability to deliver products and services as well as customers’ ability to take delivery of aircraft. The Company is adversely af fected by weak market and economic conditions in markets around the world. Protracted weaker market and economic conditions and their knock-on effects could result in (i) additional requests by customers to postpone delivery or cancel existing orders for aircraft (including helicopters) or other products including services, (ii) decisions by customers to review their eet strategy, (iii) weak levels of passenger demand for air travel and cargo activity more generally, (iv) a sustained reduction in the volume of air travel for business purposes, and (v) prolonged or additional travel limitations and restrictions, which could negatively impact the Company’s results of operations. On 23 March 2020, the Company secured the New Credit Facility in addition to the existing €3 billion revolving credit facility and withdrew its 2020 guidance due to the volatility of the situation. Given the continued impact of COVID-19 on the business and the associated risks, no new guidance was issued by the Company in 2020 on commercial aircraft deliveries or EBIT. On 8 April 2020, the Company announced its decision to adapt commercial aircraft production rates to 40 per month for the A320 Family, two per month for A330 and six per month for A350 in response to the new COVID-19 market environment. This represented a reduction of the March 2020 pre-COVID-19 average rates of roughly one third. Subsequently the current market situation led to a slight adjustment in the A350 rate from six to five aircraft a month for now. With these new rates, the Company intended to preserve its ability to meet customer demand while protecting its ability to further adapt as the global market evolves. On 30 June 2020, the Company announced plans to adapt its global workforce, principally in France, Germany, Spain and the UK, and resize its commercial aircraft activity in response to the COVID-19 crisis. This adaptation was expected to result in a reduction of around 15,000 positions no later than summer 2021. Working time adaptation and mitigation measures supported by the governments have reduced the number of positions subject to the restructuring plan. Taking into consideration the actual departures since the initial announcement, the remaining number of positions subject to the restructuring plan amounts to approximately 6,100 as of 31 December 2020, including pre- retirement headcount under German Altersteilzeit (“ ATZ ”).

Commercial Aircraft and Helicopter Market Factors

market for commercial aircraft, such as (i) the average age and technical obsolescence of the eet relative to new aircraft; (ii) the number and characteristics of aircraft taken out of service and parked pending potential return into service; (iii) passenger and freight load factors; (iv) airline pricing policies and resultant yields; (v) airline financial health; (vi) the availability of third party financing for aircraft purchases; (vii) evolution of fuel price;

Historically, the Company has experienced that order intake for commercial aircraft has shown cyclical trends, due in part to changes in passenger demand for air travel and the air cargo share of freight activity, which are in turn driven by a range of economic variables, such as GDP growth, private consumption levels or working age population size. Other factors, however, play an important role in determining the

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Airbus / Registration Document 2020