HOW WELL IS AIRBUS PERFORMING GLOBALLY?
Headquartered in Toulouse, France, Airbus Group SE is a European multinational aerospace and defense company that consists of the three business divisions: Airbus, Airbus Defense and Space, and Airbus Helicopters. Airbus competes heavily with Boeing for making commercial airliners and military aircraft. For the first half of Airbus Group SE’s’ fiscal 2015 year, revenues were $31.8 billion, up 6 percent from the prior year. The company’s operating income of $2.1 billion was also up 6 percent, and earnings per share were up 34 percent at $2.13 for the first half of 2015. Airbus added 348 new planes to its order book in the first half of 2015, nearly double the prior year period, rising 94.5 percent to $59.3 billion. The company’s backlog of work to be done is now valued at $1.02 trillion. Simply put, Airbus has all engines running at full steam. The company recently finalized its biggest order, $26.5 billion deal with India’s budget airline, IndiGo, which ordered 250 A320neo family aircraft for $27 billion. The aircraft is a more fuel efficient Airbus, delivering on low-cost fares and enabling the company to grow further. Airbus is also scheduled to deliver seven A330s in 2017 and a further eight to China Eastern Airlines Corporation in 2018. It will also help China Eastern Airlines to meet rising passenger demand for mid and long routes. According to the International Air Transport Association, China will be the world’s largest air passenger market by 2034.
1. At the Airbus website (www.airbus.com), determine the percentage breakdown of Airbus revenues across continents. What is the company’s strategy with regards to global expansion? Is that strategy working well for the company?