Airbus // Universal Registration Document 2021

1. Information on the Company’s Activities /

1.1 Presentation of the Company

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whether increased ticket prices might dampen future growth of passenger demand. There is no historical precedent for this, although past increases in fuel prices have been largely passed through to consumers. 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 our 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. Growth and Replacement. Air transport is a global industry and demand for aircraft is subject to differences in the performance of national and regional economies as well as the evolution of energy costs. However aircraft are liquid assets that can be moved from one region to another and this provides a degree of mitigation to fluctuation of demand. At the end of 2021, Airbus’ backlog was 7,082 aircraft, a reduction of 102 versus the prior year. Close proximity and attentiveness to customer needs has enabled careful management of this backlog to mitigate the effect on production rates from the pandemic, and third-party financiers have continued to support the delivery of new, more environmentally-efficient aircraft. Airline network development: “hub” and “point-to-point” networks. Following deregulation, major airlines have sought to tailor their route networks and fleets to continuing changes in customer demand. Accordingly, where origin and destination demand prove sufficiently strong, airlines often employ direct, or “point-to-point” route services. However, where demand between two destinations proves insufficient, airlines have developed highly efficient “hub and spoke” systems, which provide passengers with access to a far greater number of air travel destinations through one or more flight connections. The chosen system of route networks in turn affects aircraft demand, as hubs permit fleet standardisation around both smaller aircraft types for the short, high frequency and lower density routes that feed the hubs and larger aircraft types for the longer and higher density routes between hubs, themselves large point-to-point markets. As deregulation has led airlines to diversify their route network strategies, it has at the same time therefore encouraged the development of a wider range of aircraft in order to implement such strategies. Airbus, like others in the industry, believes that route networks will continue to grow through expansion of capacity on existing routes and through the introduction of new routes. These new route markets are expected to be well served by the Airbus product offering, such as the A350 XWB and A330neo. Airbus believes that it is well positioned to meet current and future market requirements given its complete family of products. Once the air transport industry rebuilds after the COVID-19 crisis, airlines will review their positioning and business models in the frame of restructuring their operations. Airbus expects that existing networks will in the most part be continued, but airlines will also have the opportunity to develop their networks differently having undergone a forced, temporary downsizing. The availability from 2023 onwards of new-generation longer- range single-aisle aircraft such as the A321XLR will provide greater optionality to airlines. Alliances. The development of world airline alliances has reinforced the pattern of airline network development described above. According to data from Cirium, a UK-based aviation

notably trans‑Pacific, Europe-Asia and intra-Asia markets have remained at low levels of activity. Overall, passenger air traffic in 2021 – measured in RPKs – grew 18% versus 2020 however remained almost 60% below 2019 levels according to IATA. Freight traf fic has remained robust and yields have been historically high. This has been driven by strong growth in e-commerce, increases in maritime containerised shipping rates and a shortage of belly freight capacity due to large numbers of widebody aircraft being stored. 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. Over the full year Airbus delivered 611 new aircraft to 88 customers and achieved a net order intake of 507 aircraft. At the end of 2021 Airbus maintained a firm order backlog of 7,082 aircraft, over 80% of which are for the A320 family. Competitive market-based financing for new aircraft deliveries has remained available. The recovery is likely to follow a similar pattern to previous recoveries: many stored aircraf t wi l l return to service, complementing newly-delivered aircraft to allow recovery of flight frequencies; load factors and aircraft utilisation will improve and then yields. The balance between these is dependent on individual actions in a competitive marketplace for air transport services. Provided that the consequences of the emergence of further COVID variants can be limited by increased vaccination coverage and immunity, 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 physical links between peoples 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 pass legislation to drive towards net-zero emissions of carbon dioxide, aviation will 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

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Airbus / Registration Document 2021