Airbus - 2022 Universal Registration Document

1. Information on the Company’s Activities / 1.1 Presentation of the Company

84 customers and net order intake was 820 aircraft. At the end of 2022 Airbus’ firm order backlog was 7,239 aircraft, over 80% of which are for the A320 family. Competitive market-based financing for new aircraft deliveries has remained available. The recovery is following a similar pattern to previous recoveries: many stored aircraft will return to service, complementing newly delivered aircraft to allow recovery of flight frequencies; load factors and aircraft utilisation will improve, followed by yields. The balance between these is dependent on individual operators’ actions in a competitive marketplace for air transport services. As the world demonstrates greater collective resistance to successive COVID variants, the Company continues to expect the commercial aircraft market to return to pre-COVID levels between 2023 and 2025 and that the pandemic has not structurally changed the long-term market for commercial aircraft. Overall growth. The long-term market for passenger aircraft depends primarily on passenger demand for air travel, which is itself primarily driven by economic or GDP growth, trade, fare levels and demographic growth. Measured in revenue passenger kilometres, air travel increased in every year from 1967 to 2000, except for 1991 due to the Gulf War, resulting in an average annual growth rate of 7.9% for the period. Demand for air transportation also proved resilient in the years following 2001, when successive shocks, including 9/11 and SARS in Asia, dampened demand. At the end of 2008 and in 2009, the financial crisis and global economic difficulties witnessed resulted in only the third period of negative traffic growth during the jet age, and a cyclical downturn for airlines in terms of traffic (both passenger and cargo), yields and profitability. Despite these perturbations, the market recovered, driven by the underlying demand for air transport. After 2009 until the current crisis, the industry benefited from a prolonged period of stability which enabled airlines to collectively deliver profitability at historically high levels. The fundamental drivers behind the need for air transport remain unchanged, as a means for enabling highly-efficient physical links between people and distribution of goods at a global scale. However it is an activity which must be conducted in a sustainable manner, and Airbus is committed to pioneering sustainable aviation. As more governments adapt public policy to drive towards net-zero GHG emissions, aviation will continue to play its part. Decarbonisation is likely to be encouraged by regulatory measures including incentives and taxation to varied extents in different regions. This may increase the differentiation between the costs of operation of more or less fuel-efficient aircraft. There is speculation as to whether increased ticket prices might dampen future growth of passenger demand. There is no historical precedent for this as aviation growth has been characterised by consistently strong improvements in efficiency and past increases in fuel prices have been largely passed through to consumers, although regional differences may be observed. Airbus is focused on providing more fuel efficient aircraft for fleet replacement and growth. Through its analysis Airbus continues to believe in the long-term growth potential of the industry, with a continuing drive to the sustainable operation of commercial aircraft aimed at meeting the needs of both the environment and air passengers in the coming years.

fleets, the availability of aircraft financing sources and market evolutionary factors. The performance, competitive posture and strategy of aircraft manufacturers, airlines, cargo operators and leasing companies as well as wars, political unrest, pandemics and extraordinary events may also precipitate changes in demand and lead to short-term market imbalances. For further information, see “– Risk Factors – Business-Related Risks – Commercial Aircraft and Helicopter Market Factors”. Air transport market recovery continued throughout 2022, with IATA reporting traffic (Revenue Passenger Kilometres) globally up from 41.7% of 2019 volumes in 2021 to 68.5%. Load factors increased 12 points to nearly 79%. As restrictions were removed, pent-up demand for air travel caused pressure to increase service which outstripped the ability of airlines, airports and infrastructure to provide it, with the notable exception of markets directly impacted by the continuation of China’s “zero-COVID” policies. Elsewhere, Domestic markets recovered to 2019 capacity levels by the end of the year, intra-regional market recovery continued outside Asia and intercontinental market recovery accelerated, led by a particularly strong transatlantic market. Airline yields remained strong and load factors recovered notably. Conversely, Russia's invasion of Ukraine impacted air transport in many ways, including the application of sanctions to Russian operations, the sequestration of hundreds of civil aircraft owned by Western lessors and the closure of Russian airspace to the airlines of all countries choosing to apply sanctions. Russian air transport operations continued without the support of Western manufacturers and suppliers in a market essentially isolated from the rest of the world. The war created pressure on some critical raw materials and exacerbated supply chain tensions as well as driving significant volatility in fuel prices for air transport and heightened inflationary trends, increasing the risk of recession in some, mainly European countries. However the anticipated cooling of demand due to inflationary pressures has yet to materialise and the relaxation of China’s “zero-COVID” policy may mitigate impacts and allow the industry to return to a trajectory more influenced by macroeconomics and demographics. Around 1% of world freight tonne-kilometres is carried by air, although this represents ~30% of the total value of freight. After a period of exceptional demand and high yields during the pandemic recovery, the air cargo market cooled during 2022 and is now driven more by the habitual, cyclical, macroeconomic factors. Short-term headwinds include inflation, the strength of the US dollar and trade disruption. Equally, belly cargo capacity will return to the market as stored widebody aircraft re-enter service. Significant numbers of converted freighter aircraft ordered during the pandemic will enter service, mainly replacing older aircraft. Yet e-commerce growth will continue to be a strong driving force and will take an increasing share of the air cargo market. The freighter fleet contains a higher proportion of older aircraft and consequently future deliveries will be more for replacement than growth. Having adapted its production rates in 2020 in response to the severity and speed of the industry downturn, Airbus was able in 2021 to stabilise widebody production and start to increase A320 Family production, placing unallocated aircraft and delivering part of the accumulated inventory. The process continued throughout 2022 although supply chain challenges impacted the company’s ability to ramp-up production at the originally intended pace, transforming a demand crisis into one of supply. Over the full year Airbus net deliveries totalled 661 new aircraft to

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Airbus / Universal Registration Document 2022