Airbus: Major space division problems
June 25, 2024
By Chris Forrester
Airbus Space & Defence has problems. Unlike its major rival Boeing, there’s nothing wrong with its A320 aircraft production, but Airbus’s troubled space division has implemented a €900 million write down in charges – effectively losses against its Q2 2024 revenues – and Airbus CEO Guillaume Faury said a thorough review has led to a complete rethink of its business strategy. This could lead to a merger of its space division.
That review has meant all strategic options for the satellite division are now under consideration. Faury admitted that it had looked at product schedules, workloads, suppliers, integration costs, make-or-buy implications and commercial orders.
“Against this backdrop, we are also evaluating all strategic options for our space business, such as potential restructuring, cooperation models and potential merger and acquisition options,” Faury stated.
Faury told analysts on a June 24th call: “As a result, we have updated the estimates at completion, mainly on telecommunications, navigation and observation programmes. We have revised the past, present and future profitability.”
He admitted that satellite orders booked between 2018 and 2021 that had suffered validation problems in particular its Airbus OneSat which is a software-defined communications version.
He added that the detailed space division review had not yet been completed, but as far as the €900 million write down was concerned Airbus wanted to ‘bite the bullet today” as it faced these headwinds.
Airbus has readjusted its 2024 financial guidance (its results will be released on July 30th). It now expects to deliver a lower target of 770 commercial aircraft and overall see free cash-flow of around €3.5 billion, down from an. earlier forecast of €4 billion.