Airbus profits skyrocket while rival Boeing stumbles over 737 MAX crisis
Europe’s Airbus has beaten its own records with skyrocketing half-year profits, boasting a strong demand from airlines for its fuel-efficient jets. In contrast, US rival Boeing suffered huge losses over the 737 MAX grounding.
Airbus revenues soared 24 percent in the first half of 2019 to €30.1 billion ($33.6 billion), while net profit grew to €1.2 billion compared to €496 million in the same period last year, the plane maker’s chief executive Guillaume Faury said during a conference call on Wednesday.
These results follow Tuesday’s announcement that Air France-KLM placed a weighty order for 60 of Airbus’ new Canadian-made A220-300 planes for short- and medium-haul flights – an illustration of the growing demand for Airbus airliners. Most of the profit reported, however, came from increased production of the company’s highly popular A320 single-aisle planes. Since the start of the year, Airbus has delivered 294 of these, and confirmed its goal of the total of 880 to 890 deliveries till the year end.
The A320 is a direct competitor to Boeing’s 737 MAX, the ill-fated plane that has been grounded indefinitely by regulators worldwide since mid-March after two crashes in Ethiopia and Indonesia resulted in the deaths of 346 people. Though a large number of MAX jets have been long expected by airlines worldwide, the US airplane manufacturer will not be able to deliver any until regulators have declared them safe.
Last week, Boeing posted its largest-ever quarterly loss, calculating the total cost of the 737 MAX crisis at over $8 billion, Reuters reported. The sum mostly covers compensation the manufacturer will have to pay airlines for delayed deliveries and lower production. The company even warned it may have to shut down production of the grounded jet completely if the regulators don’t come up with an assessment soon.
A number of airlines have already demanded compensation from the US company for failed plane deliveries, while Saudi Arabian budget carrier Flyadeal became the first airline to cancel an order of 50 Boeing jets worth up to $5.9 billion in favor of a deal with Airbus.
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