Airbus SE generated positive cash flow for the third quarter in a row, while warning that new coronavirus flareups threaten progress toward a recovery in air travel.
The European planemaker reported 1.2 billion euros ($1.5 billion) in adjusted free cash flow between January and March, when aircraft deliveries surpassed the mostly pre-pandemic first quarter of 2020. Profit came in ahead of analysts’ estimates.
Chief Executive Officer Guillaume Faury has been able to juggle delivery schedules while pressing customers to keep taking new planes, despite slow progress towards a return to normal for the travel industry. He reiterated a target to increase production of Airbus’s top-selling A320-series jets later this year.
Still, setbacks in fighting the Covid-19 pandemic have forced governments to tighten borders, weakening the airlines and leasing firms that make up Airbus’s customer base. Most recently, a virus surge in India has quieted one of the world’s strongest aviation rebounds. Airbus warned the outlook hinges on no further disruptions to air travel or the global economy.
“We still face uncertainties which result in a lack of predictability,” Faury said. “The path to recovery will not necessarily be linear.” While Airbus stuck to financial targets it set out earlier this year, developments over the next month or two will be key for the Toulouse, France-based planemaker and its US rival Boeing. A lack of coordination in
Europe on travel restrictions remains a concern, as well as the situation in India, where Airbus has major customers like IndiGo. Faury said he hasn’t yet seen a direct impact in the region, but doesn’t expect things to be as good there as they were.
At stake is the summer high season, whose start has already been delayed. Deutsche Lufthansa AG reined in capacity plans for the early summer, while London’s Heathrow airport cut its full year passenger outlook. Boeing reported that it burned more cash than expected during the first quarter.
The US planemaker was in the midst of a 20-month grounding of its 737 Max when the pandemic started, and in recent months has struggled with manufacturing issues that held up deliveries of that plane and the larger 787 Dreamliner.
Airbus reported adjusted earnings before interest and taxes of 694 million euros for the first quarter, and revenue of 10.5 billion euros.