Airbus Market Position

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Airbus Market Position

Airbus Market Position

Boeing suffered a fatal blow as a result of the COVID-19 epidemic, which made its predicament from the grounded 737 MAX aircraft much worse. The American aerospace giant's backlog has dramatically decreased as it has burned through tens of billions of dollars over the last two years, weakening its financial sheet.

In comparison, Airbus (EADSY -0.20%) has only had a slight setback as a result of the epidemic. As 2021 came to a close, the European aircraft maker delivered another good profits report on Thursday.

In 2021, Airbus said it delivered 611 commercial aircraft, up from 566 the year before. This was more than the business's estimated 600 deliveries for October. As a result, despite reduced sales from Airbus' military division, total revenue for the year increased 4% to 52.1 billion euros ($59.3 billion).

Additionally, Airbus easily outperformed its profit and cash flow forecasts. In 2021, the company's adjusted operating profit was 4.9 billion euros ($5.5 billion), and it generated free cash flow of 3.5 billion euros ($4 billion). The most recent forecast for Airbus predicted adjusted operating profit for the whole year of 4.5 billion euros and free cash flow of 2.5 billion euros.

Airbus had a net cash position of 7.6 billion euros ($8.7 billion) at the end of 2021 as a result of its robust free cash flow from the previous year. This has given it the assurance it needs to restart its dividend, with a projected 1.5 euro per share yearly payout. In 2022, Airbus anticipates that its net cash position will continue to increase, which will place the business in a fantastic position to continue making investments in cutting-edge technologies.

Airbus is well positioned for future growth after 2022. The production of the A320neo family is expected to increase to a rate of 65 months by the summer. That would bring the most well-liked commercial jet family of Airbus' annual production to close to 750 units. In order to maintain its market share lead against Boeing's 737 MAX, the business is putting pressure on suppliers to get ready for future manufacturing rate hikes as early as 2024.

In addition, Airbus is still aiming for an A220 production pace of 14 months by the end of 2025. That may make the program profitable. Airbus still has to do some effort to expand the A220 order book so that it can support manufacturing at that level, but the year 2022 is off to a good start. In January, Airbus placed a reservation for 22 A220s. It completed two further orders this week alone for a total of 50 A220s. Over the next years, Airbus' wide-body production will also pick up a little, albeit probably not to pre-pandemic levels.

Although the future seems bright for Airbus, the company's stock is still only worth about $100 billion on the market. The next few years could be very profitable for shareholders if Airbus' growth strategies pan out as expected.

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