Specialist
Former Director at Airbus SE
Agenda
- Commercial aerospace recovery – challenges and opportunities
- Competitive environment and Airbus’s (PAR: AIR) positioning vs Boeing (NYSE: BA)
- Supply chain management, ramp-up ability and potential bottlenecks
- 2022 outlook, highlighting technology innovation such as eVTOL (electric vertical take-off and landing)
Questions
1.
How has the commercial aerospace recovery progressed so far? What’s your recovery outlook and how has it developed across different regions?
2.
How is long haul or longer international travel faring? It’s recovering slower, but what are your thoughts on these trends and the recovery pace? How might that filter through for your outlook for narrow vs wide body?
3.
You mentioned the Boeing 737 Max difficulties pre-pandemic. How would you assess Airbus’s positioning? How has the company performed throughout the pandemic and into the recovery, especially considering Boeing’s challenges?
4.
What opportunity is there for Airbus to increase its market share or presence in the single-aisle aircraft segment, especially through the A320 family?
5.
What’s the chance that airlines will move towards using longer-range single-aisle aircraft such as the XLR to run longer routes and shift the market more towards this? Could this be a continuing trend in the next few years?
6.
Airbus wants to deliver 600 aircraft in 2021. I believe it was at around 424 deliveries year to date in September, with only 40 that month. What are your thoughts on the target and Airbus’s ability to reach it? Do you have any concerns over the targeted 600 deliveries?
7.
How has Airbus approached airlines wanting to delay or pass on deliveries throughout the pandemic and into the recovery? How firm has the company been throughout this period?
8.
Do Airbus’s weaker delivery numbers in September 2021 vs September 2020 – 57 vs 40 – indicate lower demand than expected for new narrow bodies? How do you assess the market for new narrow-body deliveries?
9.
How has the 737 Max programme restarted? What’s your outlook here and do you expect it to impact the A320 at all?
10.
Airbus has fairly aggressive production ramp-up targets – it wants to reach 70 A320s per month by 2024. Some suppliers are sceptical about this target. How feasible do you think it is? Would you expect any supply chain challenges in reaching this ramp-up?
11.
You mentioned the lower-tier suppliers. In which supply chain areas would you expect the greatest challenges? How might Airbus mitigate this or reach the targets, given the ramp-up and supply chain challenges?
12.
There are a lot of inflationary pressures across supply chains in various markets. How might that impact Airbus’s ramp-up in the next year or so, as well as considering the 2024 targets? Might the environment make it more difficult for some small suppliers or could they manage inflation and increased cost fairly successfully?
13.
If there is a move towards consolidation among some commercial aerospace supply chain players, how might that impact players such as Airbus or Boeing?
14.
Would you expect increasing consolidation trends? Is that one way suppliers might manage some increased ramp-up targets and goals?
15.
We’ve touched on Airbus’s ramp-up rate of 70 aircraft, depending on demand, and the commercial aerospace recovery. How do you expect this target to fit into the demand picture? Is it dependent on Boeing’s weakness and winning share, or could there be a push to get newer fleets in European and US airlines?
16.
There’s some consolidation talk between Wizz and EasyJet. Do you expect consolidation among some European airlines? Is that a possibility and how might it impact Airbus?
17.
How are you assessing margin evolution as Airbus increases production and utilises more of its capacity? When do you expect margins to return to pre-pandemic levels?
18.
Could you outline Airbus’s manufacturing footprint? What utilisation do you expect as the company increases production? How did it manage production on this side throughout the pandemic?
19.
How would you expect Airbus to approach the newer programmes in a new way? Is there more opportunity for the company to in-source any manufacturing operations?
20.
What are your thoughts on the A350 freighter derivative? I believe Airbus has historically been slightly weaker on the wide-body freight market. How successful could the A350 freighter be and what’s the market for it?
21.
Could you break down the pricing difference you mentioned? You said the A350 would be an expensive aircraft. What are some pricing differentials between Airbus and Boeing? Where do you expect the expenses to come in for the freighter derivative?
22.
I believe the A321 is around 60% of the backlog. Would you expect that share to increase? How successful might the XLR be? Where do you expect A320 production to head?
23.
How has Airbus approached inventory management throughout the pandemic and what point are we at today? How might the company consider managing it in the future?
24.
How do you expect the commercial aerospace competitive landscape to evolve over the next few years? We’ve discussed some of Boeing’s challenges, but could there be any competition changes or evolution? How might that develop throughout the recovery period?
25.
You mentioned some of the emerging technology surrounding eVTOL [electric vertical take-off and landing] and similar areas. How important is it for Airbus to invest in these newer markets and focus on this as a growth area? How does that align with decarbonising aviation and the movement in that direction? How significant will that be for Airbus?
26.
What are you monitoring in Airbus’s upcoming quarterly earnings update? What questions would you want answers to? What are your expectations?
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