By Olivia Bugault 
 

--Airbus's third-quarter adjusted EBIT fell 49% to EUR820 million

--The aerospace giant is aiming for at least breakeven free cash flow for the last three months of the year

--It booked an hefty restructuring provision in the third quarter

 

Airbus SE on Thursday set a new free cash flow target for the rest of the year after booking a net loss and restructuring provision in its third quarter in the face of a persistent coronavirus pandemic that has been particularly hard on the aviation industry.

"Despite the slower air travel recovery than anticipated, we converged commercial aircraft production and deliveries in the third quarter and we stopped cash consumption in line with our ambition," Airbus Chief Executive Guillaume Faury said.

The European plane maker booked a loss of 767 million euros ($901 million) for the quarter compared with a net profit of EUR989 million a year earlier, with the more closely watched adjusted earnings before interest and taxes falling 49% to EUR820 million.

Reported EBIT swung to a loss as Airbus booked a restructuring provision of EUR1.2 billion, it said. The provision comes after Airbus said in June that it would cut 15,000 jobs--its biggest restructuring ever--in a bid to weather what it called the "gravest crisis" in the history of the industry.

Revenue fell 27% to EUR11.21 billion in its third quarter, Airbus said.

Airbus was able to stabilize its cash flow during the quarter and reported better-than-expected free cash flow before mergers and acquisitions and customer financing of EUR600 million.

The aerospace giant set a new cash target, which is to have at least breakeven free cash flow before mergers and acquisitions and customer financing in its fourth quarter. Airbus based its guidance on the assumption of "no further disruptions to the world economy, air traffic, Airbus' internal operations, and to its ability to deliver products and services," it said.

New coronavirus confinement measures recently announced by governments of countries such as France and Germany won't affect Airbus's fourth-quarter cash target, Mr. Faury said during a conference call.

The Toulouse, France-based company said it still won't issue a new EBIT or delivery guidance for the year.

Mr. Faury also confirmed during the call that the production rate of its best-selling A320 family of jets will be maintained at 40 a month until at least summer 2021 and should then increase. "Today, we have the demand to increase production" in the second half of 2021, Mr. Faury said. On the other hand, Airbus is not planning to ramp up the production of its widebody aircraft next year as the recovery in long-haul traffic should take much longer, the CEO said.

"The crisis is far from over," Mr. Faury said during the call.

 

Write to Olivia Bugault at olivia.bugault@wsj.com

 

(END) Dow Jones Newswires

October 29, 2020 05:16 ET (09:16 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.