Airbus stems cash outflow in Q3

Toulouse, France

AIRBUS SE was able to stem the outflow of cash in the third quarter, fuelling the planemaker's confidence it can emerge from the Covid-19 pandemic well-placed for a swift recovery.

The European company is on track to meet a target of "at least" break-even adjusted free cash flow in the fourth quarter, Airbus said on Thursday. The group generated 600 million euros (S$960 million) cash in the three months through September, having burned through 4.4 billion euros in the second quarter.

The update adds to mounting evidence that Airbus has fended off the most dire impact of the unprecedented aviation crisis, even as virus cases surge in the US and Europe.

CEO Guillaume Faury has so far balanced the necessary staff and output cuts with aggressive efforts to preserve the planemaker's order book and supplier base, and is working on plans to increase production of its most popular narrowbody jets from next year.

Airbus is "sitting more comfortably", Jefferies analyst Sandy Morris said in a note to clients. "After a gruesome second quarter, to reach this point so soon is remarkable."

The forecast indicates a more optimistic approach than arch rival Boeing Co, which said on Wednesday it will cut 7,000 more jobs to adapt to the jet market's "new reality". Even so, Airbus said its Q4 forecast hinges on "no further disruptions to the world economy", air traffic, and internal operations. It delivered 145 planes in Q3, compared with just 28 jetliners for Boeing.

The company surprised the market with a more ambitious target for output of its most popular programme last week, telling suppliers to be ready to support a monthly rate of 47 A320neo-family planes in the second half of 2021. The planemaker, which announced plans to cut 15,000 jobs in July, posted a restructuring charge of 1.2 billion euros. BLOOMBERG