Airbus posted higher-than-expected profit in Q2 2018

Airbus NeoAirbus posted higher-than-expected profit in Q2 2018 and confirmed its targets for the full year, as inventory of unplanned aircraft began to decrease and the cost of the new largest aircraft of the A350 company shrunk. The company reported operating profit increase to 1.15 billion EUR in Q2 2018, while revenue rose by 8% to 14.85 billion USD.

Airbus undertook its biggest reform since its inception nearly 50 years ago, replacing or updating its most lucrative product lines, and at the same time speeding up production to meet the record-breaking demand for air travel.

While the introduction of the A350 is relatively smooth and shows strong cost improvements at a time when Airbus is targeting the goal of producing ten aircraft per month by the end of the year, the smaller A320neo continues to cause headaches. The deliveries of mid-range aircraft, which carry most of the profits and liquidity to Europe’s largest aircraft manufacturer, have been postponed due to supply gaps by Pratt & Whitney and to a lesser extent by the French-American joint venture CFM.

But Airbus reached a turning point in May after the queue of semi-finished airplanes jamming the runway to the European company’s factories began to decline compared to the peak of hundreds of waiting machines.

Airbus reported that for the first time in the second quarter it delivered more A320neo aircraft with new engines compared to the previous A320. The company, however, said there were risks ahead of the “challenging” delivery forecast of a total of 800 aircraft this year.

Airbus has delivered 303 aircraft in the first half.

Analysts say it is too early for Airbus to decide whether to raise the production of the A350, although Boeing retains plans to raise the production of the 787 Dreamliner to 14 per month. With regard to smaller aircraft, the projections are that Airbus assembly plants in China and the United States will increase their volumes by 50% in the coming years.