Airbus hails return to 'normality' as profits jump

Airbus Group profits jumped 22% to €1.5bn in 2013

(GETTY IMAGES)

Aeroplane manufacturer Airbus, the pan-European giant that employs more than 17,000 people in the UK, has hailed its transition to a “normal company” after axing a damagingly burdensome political ownership structure.

Chief executive Tom Enders was thwarted by German chancellor Angela Merkel in his attempt to create a European aerospace and defence empire when she vetoed plans to merge with Britain’s BAE Systems in 2012.

However, he responded by restructuring the state-dominated share structure that has diminished French and German influence and changed the group’s name from EADS to Airbus, the aircraft for which the company is famous.

The changes did not hurt the group in the eyes of customers, with profit soaring 22 per cent to 1.5 billion euros (£824.2 million) in the 2013 results announced today.

Revenue was also up 5 per cent to 59.3 billion euros on the back of 626 aeroplane deliveries, while Airbus also set an industry best of 1,619 commercial orders.

Towards the end of last year, Emirates Airline firmed up an order for 50 extra A380s – the world’s biggest passenger jet - at the Dubai Airshow.

However, after a year that saw Airbus’ management depoliticise the company, Mr Enders vowed that 2014 would not see “any new adventures”. He added: “We are serious people, we never launch into adventures

Instead, he pledged that the group would focus on “execution, execution and execution” and Airbus will ramp up production of its best-selling A320 single-aisle aircraft from 42 to 46 a month by the second quarter of 2016.

Mr Enders added: “2013 was an important and eventful year for the group, not least because of the far-reaching makeover of our governance, shareholder structure and strategy.”

Free cash flow, which takes into account capital expenditure, was minus 818 million euros, but was 600-700 million euros better than experts at Societe Generale expected.

Zafar Khan, the French bank’s aerospace and defence analyst, said that airbus was “vague” in its 2014 forecasts, simply stating that aircraft delivery will be roughly the same as last year, with flat revenue and slight growth in operating margin.

Mr Khan added that investors might be disappointed with this year’s conservative margin prediction, but that they will be “more focused” on Airbus’ work next year and in 2016.

Airbus’ restructure has included merging the Toulouse-headquartered group’s defence and space businesses, to operate as a distinct unit alongside its jet and helicopter divisions. Mr Enders said that it was “no secret” that these divisions have been too narrowly focused on Europe and “obviously they need to be strengthened for international work”.

Other aspects of the reorganisation of Airbus include the construction of a new office campus in Blagnac, next to Toulouse Airport on the outskirts of the Southwestern French city.

Last year, EADS investors approved a plan to allow proxies for the French and German Governments to sell shares into the market, which will ensure that state interference in Airbus’ operational matters is from now on kept to a minimum.

In the UK, Airbus works on designing and manufacturing wings out of Filton and Broughton, and its British management team is based on the Strand in central London.

Airbus’ major rival in what is effectively a global duopoly, US-based Boeing, said earlier this year that it expects to deliver around 715-725 aircraft in 2014, up 10% on last year.

Last week, the Royal Air Force lifted its suspension on its Airbus-made Voyager military fleet, having grounded the aircraft earlier this month over an “in-flight issue”.

The RAF has been assured that chances of a repeat of the incident are negligible at worst.