Airbus SE: Company Strategy & Performance Analysis

Airbus SE (Airbus Group) specializes in providing aeronautics; defense and electronics solutions, and space-related services. It manufactures commercial, passenger and freight aircraft alongside corporate jets. Airbus operates its business through three divisions: commercial airplanes, helicopters and defense, space and security. It aims to integrate the helicopter and defense divisions with its commercial division to facilitate smooth decision making processes and enhance productivity.

The company has wide geographical presence across Europe, the Americas, Asia-Pacific, the Middle East and Africa. Airbus SE is headquartered in Leiden, the Netherlands.

MarketLine Premium’s company strategy reports provide in-depth coverage of the performance and strategies of the world’s leading commercial aircraft manufacturing companies. The report details company operations in key geographies and offers a comprehensive analysis of each firm’s growth strategy and financial performance. The reports benchmark company performance via key indicators, including orders, order backlog, and deliveries.

Key Highlights

Strong order backlog to drive future growth

Airbus posted an order backlog of US$1.13 trillion in 2016, as compared to US$1.07 trillion in 2015, at an annual rate of 5.6%. The commercial aircraft division reported 5.7% y-o-y increase in its order backlog, from US$1.06 trillion in 2015 to US$1.12 trillion in 2016. The commercial aircraft division’s backlog accounted for 98.9% of the total civil aerospace (includes commercial aircraft and helicopters) backlog, and helicopters accounted for 1.1% in 2016. The company’s order backlog for the commercial aircraft segment stood at 6,874 units in 2016 in comparison to 6,831 in 2015. In October 2016, Airbus delivered its 10,000th aircraft, an A350 XWB to Singapore Airlines.

Commercial aircraft segment driving overall operating revenue

Total operating revenues increased at 2.9%, from US$71.5 billion in FY2015 to US$73.6 billion in FY2016, attributed to the improved performance of the company’s civil sector due to an increase in the delivery rate of the commercial aircraft. The commercial segment accounted for 74.0% of the company’s total revenue in 2016 and grew at an annual rate of 6.9%, from US$50.9 billion in 2015 to US$54.4 billion in 2016 partly due to an increase in aircraft deliveries and favorable currency fluctuations. The segment’s aircraft deliveries rose by 8.3%, from 635 units in 2015 to 688 in 2016. Airbus Commercial Aircraft is one of the world’s leading manufacturers of passenger airliners and its product line comprises families of jetliners ranging in capacity from 100 to more than 600 seats. The single-aisle A320 family, is civil aviation’s best-selling product line; followed by the A330 family; the new-generation wide-body A350 XWB; and the flagship double-decker A380.

Growing deliveries and orders

Commercial aircraft deliveries increased for the 14th consecutive year, reaching a high of 688 aircraft to 82 customers. In 2016, 545 A320s, 66 A330s, 49 A350 XWBs, and 28 A380s were delivered. During 2015-2016, the A320 family reported 790 orders. This was followed by the A330 family which received 106, of which 42 were for the A330 neo. The number of gross orders for A350s stood at 51, while the A380 stood only received two orders. In total, the company received 949 orders which accounted for 54% of the gross market share globally. The company’s total number of net orders stood at 731 in 2016. A320s posted the highest number of net orders in 2016 – 607, followed by A330s – 83, and A340s – 41. A380s recorded no orders.

Scope

– Company Snapshot Details key indicators and rankings of Airbus in terms of revenue, net income, and operating income.

– Company SWOT Analysis Outlines Airbus SE’s strengths, weaknesses, and opportunities and threats facing the company.

– Growth Strategies Provides an overview of Airbus SE’s corporate goals and strategic initiatives and evaluates their outcomes.

– Company Performance and Competitive Landscape Analyses the company’s performance by geographical segment and provides a peer comparison on parameters such as revenue and market share.

– Key Developments Showcases Airbus SE’s recent corporate events and initiatives.

– ICT Spending Prediction Details how the company allocates its ICT budget across the core areas of its business, specifically hardware, software, IT services, communications and consulting.

Reasons to buy

- How does Airbus SE rank among its peers in terms of revenue and market share?

- What are Airbus SE ’s main growth strategies and how successful has the company been at implementing them?

- How has the company performed since 2014?

- How has Airbus SE performed in comparison to its main competitors?

- What are Airbus SE ’s strengths and weaknesses and what opportunities and threats does it face?

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