Airbus Q1 Earnings Surge 8% Despite Trade War Uncertainty

Airbus, the European aerospace giant, has reported first-quarter earnings and revenue that exceeded market expectations. The company reaffirmed its annual targets while emphasizing that it is too early to quantify the impact of the ongoing trade war, stating that "there are only losers in a trade war."

The company's adjusted operating income grew by 8% to 6.24 billion euros (7.07 billion USD), while revenue increased by 6% to 13.54 billion euros. This growth was primarily driven by the defense sector, which offset the decline in jetliner deliveries.

Airbus maintained its forecast for aircraft deliveries in 2025 at 820 units, up from 766 units in the previous year. However, the company warned that deliveries in the second half of this year may decline again due to supply chain issues. The company has secured an agreement to take over part of the facilities of the struggling U.S. aerostructures supplier, Spirit AeroSystems, which has been causing production delays for the A320 and A350 jetliners.

Despite these challenges, Airbus has kept its industrial production forecast for aircraft unchanged and reaffirmed its financial targets for 2025, including an adjusted operating profit of 7 billion euros. This metric is typically used to exclude earnings related to restructuring, currency fluctuations, and other factors.

The 2025 forecast includes the impact of partially absorbing Spirit AeroSystems but does not account for the uncertainties surrounding the escalating trade war. CEO Guillaume Faury called for a swift restoration of the 1979 treaty signed by 33 nations, which has ensured duty-free trade of aircraft and components for decades.

Recent comprehensive tariffs imposed by U.S. President Trump have disrupted the World Trade Organization's marginal agreements. If negotiations fail to find a resolution, the European Union is prepared to implement retaliatory measures. Faury stated that Airbus is in discussions with customers and suppliers but ruled out the possibility of the company absorbing tariffs for U.S. airlines receiving aircraft directly from Europe instead of its assembly plant in Alabama.

In the defense sector, Airbus has taken a more optimistic stance on the future production of the A400M military transport aircraft. The company reported "constructive" negotiations with purchasing nations. The A400M has faced delays, partial order cancellations by European launch nations, and slow exports, with orders expected to be fulfilled by 2028. However, industry experts suggest that increased military spending in Europe could reignite interest from buyers like France and Spain, who have reduced their delivery quantities.

Airbus also announced new costs of 105 million euros related to the ongoing reorganization with the defense and space division.