Airbus delivered 72 commercial aircraft in March, more than doubling its year-to-date total.
Photograph by Jasper Juinen/Bloomberg
Airbus stock made gains early on Friday as the European plane maker’s deliveries picked up in March.
The uptick comes despite uncertainty over the global air travel recovery as a number of countries, particularly in Europe, are battling a third wave of Covid-19 infections.
The Airbus delivered 72 commercial aircraft in March to 34 customers, including Delta Air Lines, American Airlines, British Airways and German carrier Deutsche Lufthansa. Asian airlines, such as China Southern, Shenzhen, China Eastern, Air China and Singapore Airlines also featured heavily on the list.
The plane maker has now delivered 125 aircraft so far this year, an improvement on the previous year, with March by far its best month. In the first three months of 2020, much of which was prepandemic, Airbus delivered 122 aircraft. As the pandemic decimated global air travel demand last year, the deliveries dried up, coming in at 566 for the year—compared with 863 in 2019.
U.S. rival Boeing fared even worse, delivering just 157 aircraft in the whole of 2020—partly due to the grounding of the 737 MAX. The MAX was grounded worldwide for almost two years following two fatal crashes in five months. The plane was put back into commercial service in December and has operated without incident.
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Airbus has now beaten Boeing when it comes to plane deliveries two years in a row. But it may struggle to retain its crown amid Boeing’s resurgence. Southwest Airlines ordered 100 more 737 MAX aircraft from the U.S. plane maker at the end of last month. The company also netted a new buyer in March as private-equity firm 777 Partners ordered two dozen MAX jets. Boeing stock has climbed 19% so far in 2021.
Airbus reported 28 orders in March, taking net orders for the year so far to -61 after Norwegian Air canceled 88 orders in February in a bid to survive.
Airbus stock climbed 2% in early trading on Friday and is now 14.5% up year-to-date.
Looking ahead. The March numbers are definitely positive for Airbus, as reflected in the share price movement.
“72 deliveries in March is a welcome rebound—to reach the guidance of flat for the year, Airbus needs to run at about 50 per month, so [it’s] above required for March but still below for the first quarter as a whole,” said Citi analyst Charles Armitage. “We remain confident about this year, but continue to worry about the longer-term supply/demand balance,” he added.
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However, concerns over travel restrictions and rising cases in Europe with the summer around the corner, may mean that positivity is short-lived. U.K. low-cost airline Jet2 suspended flights until at least Jun. 23 on Friday, due to uncertainty over the U.K. government’s plans for overseas travel, and more could follow suit.
Jefferies analyst Sandy Morris, who has a ‘hold’ rating on the stock, said deliveries were only half the picture and that investors also needed to consider Airbus’ production rate of 40 of its bestselling A320 aircraft a month.
In late 2019 and early 2020, aircraft were produced at a rate of 56-57 a month, which had a lower unit cost and were more profitable on delivery, he said.
“If an aircraft manufactured at 40/month is delivered, we imagine a higher unit cost, hence lower profitability. This we think makes forecasting one quarter’s results challenging, particularly given both the cost base and the A320 production rate will likely evolve through FY21,” Morris said.
“We suspect 1Q21 will be a tough quarter,” he added.
