Corruption charges force Airbus into loss for 2019

European plane maker Airbus ended the year 2019 with a US$1.4 billion loss due to charges it had to take on to pay off several jurisdictions over corruption charges. The year was good for the company in terms of aircraft deliveries and orders, but the legal payments pushed it into the red for the year. Airbus delivered 863 commercial aircraft through the year and ended 2019 with 768 net orders (after cancelations). As a result, the commercial aircraft unit brought in US$59.4 billion in revenue. The company’s order book is now worth more than US$512 billion. Airbus was forced to take US$6 billion in including a US$3.8 billion to settle charges it paid bribes to win aircraft orders. “We achieved a great deal in 2019. We delivered a strong underlying financial performance driven mainly by our commercial aircraft deliveries,” said Airbus Chief Executive Officer Guillaume Faury. “The reported earnings also reflect the final agreements with the authorities resolving the compliance investigations and a charge related to revised export assumptions for the A400M…Our focus in 2020 will be on reinforcing our company culture, improving operationally, and adjusting our cost structure to strengthen the financial performance and prepare for the future.” A330-800 receives EASA Type Certification: Airbus announced that its A330-800 has received joint Type Certification from the European Aviation Safety Agency (EASA) and the Federal Aviation Administration (FAA). The aircraft’s certification flight-test campaign was performed by aircraft MSN1888, which completed the programme in 370 flight test hours and 132 flights since its first flight in November 2018. Certified initially with a maximum take-off weight (MTOW) of 242 tonnes for a range capability of up to 7,500 nautical miles, the A330-800 will typically seat 220 to 260 passengers in three classes, or up to 406 travellers in a single-class high-density configuration. To date the A330neo Family has won 337 firm orders from 22 operators. A220 programme has new structure: The Government of Québec and  Bombardier have agreed upon a new ownership structure for the A220 programme under which Bombardier transferred its remaining shares in Airbus Canada Limited Partnership (Airbus Canada) to Airbus and the Government of Québec. The agreement brings the shareholdings in Airbus Canada, responsible for the A220, to 75 percent for Airbus and 25 percent for the Government of Québec respectively. The government’s stake is redeemable by Airbus in 2026 – three years later than before. As part of this transaction, Airbus, via its wholly owned subsidiary Stelia Aerospace, has also acquired the A220 and A330 work package production capabilities from Bombardier in Saint-Laurent, Québec. With this transaction, Bombardier will receive a consideration of US$591 million from Airbus of which US$531 million was received at closing and US$60 million to be paid over the 2020-21 period. The agreement also provides for the cancellation of Bombardier warrants owned by Airbus, as well as releasing Bombardier of its future funding capital requirement to Airbus Canada. Airbus and Green Africa announce partnership: Green Africa Airways, Nigeria’s Lagos-based airline, has signed a memorandum of understanding (MOU) for 50 A220-300 aircraft, one of the major orders to be placed globally for the A220 programme and the largest ever from the African continent. Babawande Afolabi, founder and CEO of Green Africa Airways said: “Together with Airbus, we are incredibly proud to announce the largest order ever for the A220 from the African continent. The Green Africa story is a story of entrepreneurial boldness, strategic foresight and an unwavering commitment to using the power of air travel to create a better future”. The A220 is purpose-built for the 100-150 seat market and at the end of January 2020 the A220 had accumulated 658 orders.