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09 January 2021 12:32

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Airbus Keeps Top Spot Despite 34% Drop In 2020 Jet Deliveries

Airbus stuck to ambitions for a partial recovery in jet production later this year, amid speculation that it may have to delay the move as Europe faces new coronavirus lockdowns. Airbus has said it wants to be in shape to raise benchmark A320-family output by 18% to 47 jets a month by July, but the goal has already slipped to the fourth quarter, according to analysts, with some saying it could slip further. Airbus was producing 60 of the jets a month before the spread of COVID-19 grounded airline fleets earlier this year. Asked about the output plans at a news conference on annual deliveries, Chief Executive Guillaume Faury said current plans pointed to an increase in the second half of the year, but noted "a lot of uncertainties" because of the coronavirus crisis. Airbus plans a virtual briefing with the heads of some its major suppliers in coming days in a move expected to set the manufacturing tone for the coming year, industry sources said.

Delaying the planned increase in production to 47 aircraft a month would prolong financial pressure just as Airbus is struggling to reach targets for job reductions, especially at its headquarters in France and in German plants, sources said. Faury is expected to force significant cuts among executive posts as part of the biggest restructuring in the company's history as it contends with a coronavirus slump in air travel. Despite renewed lockdowns in Europe, Airbus confirmed its position as the world's largest planemaker with stronger than expected deliveries of 566 jets last year. Europe's Airbus posted stronger-than-expected deliveries of 566 jets in 2020, remaining the world's largest plane maker as a year of pandemic-induced upheaval for air travel coincided with a grounding crisis at U.S. rival Boeing. Deliveries fell by 34% from a record posted a year earlier, when travel demand was riding high on the increasing mobility of consumers in fast-growing markets across Asia.

Now, the aerospace industry is wrestling with the reluctance of most airlines to take delivery of jets as they struggle to save cash, and a drop in air traffic that Airbus says could take until 2023 or 2025 to regain the pre-pandemic levels of 2019. Still, Airbus said it had delivered 566 aircraft in 2020, exceeding estimates earlier in the year when the coronavirus crisis led to a lockdown of major travel markets. "We can be cautiously optimistic for 2021…but challenges and uncertainties remain high," Chief Executive Guillaume Faury told reporters. The announcement confirmed a Reuters report on Tuesday that Airbus had delivered more than 560 jets in 2020. Airbus sold a net total of 268 aircraft last year after adjusting for cancellations, down from 768 in 2019.

Hampered by the grounding of its best-selling 737 MAX, Boeing delivered 118 jets between January and November and had a negative total of 454 net orders before accounting adjustments, giving Airbus an unassailable lead. Airbus deliveries rose sharply in the second half of the year compared with the first months of the crisis as Airbus made a push for delivery agreements with many airlines, in some cases allowing for temporary storage, according to industry sources. But Airbus said virtually all new planes had entered service, even though many were not being flown as intensively as they would have been before coronavirus upended growth plans. Airbus said it had taken the decision to cancel the deal, but questions remain over 108 other orders from the troubled Malaysian budget carrier. Airbus has told a Malaysian court it stands to lose more than $5 billion worth of orders as it challenges AirAsia X's debt-restructuring plans.

In total Airbus lost orders for 26 wide-body jets, reflecting a slump in intercontinental travel that is expected to be the slowest segment to recover. They were, however, dwarfed by cancellations to be reported by Boeing next week after airlines and leasing companies cancelled hundreds of orders for the MAX during the grounding. With the industry's main showcase, the Paris Airshow, cancelled in 2021, Airbus cautioned it did not expect a return towards big-ticket jet orders while travel remained depressed. Airbus delivered 566 aircraft in 2020, maintaining its crown as the world's largest planemaker for a second year as U.S. rival Boeing remained mired for most of that period in the grounding of its 737 MAX, company data showed on Friday. Deliveries from the European planemaker fell 34% from a record 863 in 2019 as the coronavirus crisis hit air travel demand.

The announcement confirms a Reuters report on Tuesday that Airbus had delivered more than 560 aircraft in 2020, beating an internal target.. Airbus sold a net total of 268 aircraft after adjusting for cancellations, down from 768 in 2019. Cancellations for Airbus jets included 10 A350 wide-body jets on order from troubled Malaysian carrier AirAsia X. In total Airbus lost orders for 26 wide-body jets, reflecting a continued severe slowdown in intercontinental travel - expected to be the slowest travel industry segment to recover from the pandemic. Airbus is planning a summit meeting with major suppliers in the coming days, amid mounting speculation that it may have to delay planned jet output increases as Europe faces a resurgent coronavirus crisis, industry sources said. The COVID-19 pandemic caused Airbus (OTC:EADSY) deliveries to slump in 2020, but the European aerospace giant still did enough to come out ahead of archrival Boeing (NYSE:BA) and maintain its title as world's largest planemaker for a second year. Airbus said Friday it delivered 566 aircraft for the year, down 34% from a record 863 deliveries a year prior. Airbus announced 268 aircraft sales for the year, adjusted for cancellations, a decline of 65% from 768 in 2019. December was Airbus' strongest month of the year, with a total of 89 deliveries. "Working hand-in-hand with our customers allowed us to navigate a difficult year," Airbus CEO Guillaume Faury said in a statement. Boeing has faced the same COVID-19 challenge as Airbus, but also was dealing with the continued grounding of its 737 MAX after a pair of fatal accidents. Boeing delivered 118 jets between January and November and had a negative total of 454 net orders before accounting adjustments, giving Airbus an unassailable lead for the year. The plane was cleared to fly in mid-November after 20 months on the ground, allowing deliveries to resume, but the issues led to a lost year for Boeing. Airlines have been forced to scale back purchases of aircraft by makers such as Airbus as a result of the coronavirus crisis European plane maker Airbus said Friday that it garnered just 268 net new orders last year, a drop of 65 percent year-on-year reflecting persistent fears about the prospects for air travel amid the coronavirus crisis. The new orders take into account 115 cancellations as airlines scaled back their ambitions because of uncertainty about how long international travel restrictions will remain in place. "Based on our 2020 deliveries, we are cautiously optimistic as we look into 2021, although challenges and uncertainties remain high in the short term," chief executive Guillaume Faury said in a statement. Airlines are facing their worst year ever, the International Air Transport Association warned in November, with the COVID crisis likely to have slashed industry revenue by 60 percent in 2020. Explore further Airbus posts net loss on plunging deliveries during pandemic