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The biggest capacity increases in low-cost wide-body traffic this year have come from Asian carriers, such as Singapore’s
Remember the days when New York-London, Los Angeles-Paris and Chicago-Barcelona round trips were sold for around $200? In the minds of many Americans, the much-touted “long-haul, low-cost” transformation of air travel ended when the big disrupter of this market, Norwegian Air Shuttle NAS 2.68%increase; green up pointing triangle, was forced to exit trans-Atlantic routes in 2021.
Yet the revolution may be more alive than ever, just in a different form.
Schedules for July and August show that budget airlines plan to offer 2.7 million monthly seats on wide-body jets such as the Boeing BA 0.33%increase; green up pointing triangle 787 Dreamliner and Airbus’s AIR -0.39%decrease; red down pointing triangle A330 and A350. In 2018 and 2019, which was the heyday of Norwegian and its peers—namely IAG-owned Level, Malaysia’s AirAsia X 5238 -0.61%decrease; red down pointing triangle and Australia’s Jetstar—that figure was below two million, according to Cirium Diio Mi.
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The company sees demand for more than 43,000 passenger and freighter aircraft between 2025 and 2044
Airbus will increase shareholder returns, raising its dividend payout ratio to 30%-50% amid robust aircraft demand.
Airbus said it would increase shareholder returns in the coming years, betting that robust demand for aircraft will continue to fuel growth.
The European plane maker said Wednesday that it was lifting its dividend payout ratio to between 30% and 50% from a current range of 30% to 40%. The company said special dividends and share buybacks remained on the table to return extra cash to shareholders.
The move shows a growing divide between Airbus and Boeing, which suspended dividend payments in March 2020. Airbus’s beleaguered rival has been mired in safety and production issues in recent years and is working to recover from the reputational and financial fallout.
Airbus shares rose more than 3% following the announcement that came during the Paris Air Show. The company bagged several aircraft orders at the annual trade event, underscoring strong demand for planes as airlines continue to expand capacity.
Airbus anticipates global demand for more than 43,000 passenger and freighter aircraft between 2025 and 2044, saying single-aisle planes would account for the bulk of new passenger-aircraft demand over the next two decades.
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Airbus said it won’t be meeting its annual targets for the year, including the number of commercial aircraft it planned to deliver, after its space-systems management team identified further commercial and technical challenges.
The European plane maker on Monday said that it will also book charges of about €900 million ($962.5 million) in the first half of 2024 following an extensive review of its space-systems programs.
Airbus expects to end the year delivering 770 commercial aircraft, down from a prior outlook of 800 commercial aircraft deliveries a couple of months ago.
The company said its A320 ramp-up trajectory has been adjusted to reflect specific supply-chain challenges in a degraded operating environment, and that its target production rate of 75 A320 Family aircraft a month is now set to be reached a year later, in 2027.
Airbus also forecasts adjusted earnings before interest and taxes of about €5.5 billion, below the €6.5 billion to €7 billion expected previously.
Airbus’s free cash flow before customer financing expectations have also been lowered to €3.5 billion from €4 billion, the company said.
The first-half expenses are mainly related to updated assumptions on schedules, workload, sourcing, risks and costs over the lifetime of certain telecommunications, navigation and observation programs, Airbus said.
Airbus’ first-half results are set to be published on July 30.
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Airbus will pay Spirit $439M for the sites and provide $200M in credit lines. Airbus agreed to acquire some Spirit AeroSystems facilities that make parts for its jets, moving to take direct control of production in a bid to stabilize supply chains after months of disruption.
The companies said Monday that they had entered into a definitive deal for Airbus to take over several of Spirit’s plants in the U.S., Europe and Africa that produce fuselage sections and other components for Airbus’s commercial aircraft.
Spirit, which split off from Boeing BA 3.18%increase; green up pointing triangle about two decades ago, has been at the center of quality issues affecting 737 MAX jets. Spirit made the fuselage involved in last year’s Alaska Airlines emergency landing.
The deal with Airbus comes months after U.S. rival Boeing struck a roughly $4.7 billion agreement to acquire the Kansas-based jet-parts maker, including most Boeing-related commercial operations as well as additional commercial, defense and aftermarket operations.
Airbus Chief Executive Guillaume Faury told shareholders at the company’s annual general meeting earlier this month that supply-chain hurdles, particularly with Spirit, were putting pressure on plans to ramp up production of its A220 narrow-body and A350 wide-body aircraft. Airbus was forced to delay the entry into service of the A350 freighter variant to the second half of 2027 from 2026 previously.
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