Corruption offenses are expensive for aircraft manufacturers – 2019 results show red numbers.
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It wasn’t until the end of January that the US aircraft manufacturer Boeing had to announce a loss of $ 636 million due to the debacle surrounding the 737 Max. Its main competitor, Airbus, was able to benefit from Boeing’s weakness in the market – but the European consortium is also in the red. For example, Airbus posted a loss of 1.36 billion euros in 2019, as the company announced on Thursday. The reason for this was fines after an agreement with authorities for allegations of bribery and corruption. Airbus had agreed to pay a total of 3.6 billion euros to France, Great Britain and the United States.
In France, the lion’s share of the punishment was due in the corruption affair – namely 2.1 billion euros. In the UK, the fine is just under 984 million euros, the US is said to get just under 526 million euros. The former German CEO Thomas Enders had already attuned the employees of the aerospace group to the possibility of “substantial penalties”. The investigation was triggered by the company’s voluntary disclosure. Among other things, the authorities investigated allegations of bribery in connection with contracts for the sale of civil aircraft and satellites.
Austro threat to Airbus
Defense Minister Klaudia Tanner (ÖVP) has meanwhile threatened the Airbus Group to reverse the Eurofighter purchase agreement signed in 2003 and called for “full cooperation with the Republic of the authorities in the final clarification of the Eurofighter case”.
In addition to the penalties, Airbus had to pay special charges of 1.2 billion euros due to increasingly poor export prospects for the A400M military transporter. One reason is the ban on arms exports to Saudi Arabia, the company says.
Despite the loss, the Airbus shareholders will receive a dividend increased to EUR 1.80 (previous year: 1.65). Operationally, the year was quite pleasing for Airbus: the operating profit adjusted for the special effects mentioned rose by 19 percent to 6.9 billion euros. Sales increased by eleven percent to 70.5 billion euros. For 2020, Airbus anticipates a further increase in adjusted operating profit to 7.5 billion euros. However, this is dependent on the global economy and air traffic growing as expected and there is no major turbulence due to the spread of the corona virus or the customs dispute.
New delivery record
Airbus plans to deliver around 880 civil aircraft by 2020. This would be a further increase over the record number of 863 aircraft in 2019, including 642 A320 family aircraft. Together with its suppliers, the company is exploring an expansion of the A320 program to include the monthly production rate of 63 machines. The number of net orders for civil aircraft rose to 768 last year, 21 more than in the previous year.
Meanwhile, Airbus is negotiating a pre-order for up to 100 A220 jets, according to industry circles. It had previously been confirmed that the heavily indebted Canadian train and aircraft manufacturer Bombardier is separating from its remaining shares in the construction of the smallest Airbus commercial aircraft, the A220. Bombardier is now likely to be smashed.
www.airbus.com
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