Aviation
Airbus Shrugs Off Canceled Plane Orders
BEIJING – Airbus Group NV Chief Executive Tom Enders on Wednesday said a flurry of order cancellations for its commercial jetliners doesn’t herald a market downturn and that many of the deals for single-aisle jets will return at a later date.
Net commercial jet order intake this year already is ahead of planned deliveries with “a lot more orders” to come, Mr. Enders said. “The market is still very strong” with weak spots such as Asia merely regional blips, he said.
Airbus on Tuesday reported a 31% rise in second-quarter net profit to €696 million ($933.3 million) as sales advanced 7% in the quarter to €14.5 billion. The company’s shares rose more than 3.7% in early Paris trading.
Airbus has suffered more than 225 order canceled this year, including a decision by Emirates Airlinenot to acquire 70 A350 long-range jets. That number isn’t alarming, Mr. Enders said, with only the Emirates development truly unforeseen.
Cancellations particularly of the A320 single-aisle jet, the backbone of Airbus production, are driven partly by a transition to a newer model, the A320neo for “new engine options,” Mr. Enders said. Deals with airlines that normally would delay A320 orders are now being canceled because the Toulouse-based plane maker wants to quickly shift to building only the A320neo, which starts being delivered next year.
“We have to cancel these old orders and these are normally transferred into new orders,” Mr. Enders said. More A320 cancellations of this type are likely this year and next, he said. In some cases, the replacement deals are booked at better financial terms, Mr. Enders said.
His comments come just a day after Airbus said it had canceled the sale of six A380 superjumbos to Japan’s Skymark Airlines. 9204.TO -13.60% Two of the planes have already been assembled leaving the manufacturer to seek other buyers at a time it has struggled to win new orders for its flagship plane.
Mr. Enders said not delivering the Skymark planes wouldn’t undermine a long-standing goal for A380 shipments next year to reach break even after years of losses. The deal with the Japanese carrier was canceled before the complex cabin interior was installed which should make re-marketing the plane easier, he said.
Other A380 customers have also indicated they may not want the jet, such as Virgin Atlantic Airways. “We have cases where airlines are in the order backlog but not in the actual production plan,” Mr. Enders said, without naming specific airlines.
Sales campaigns are ongoing to secure more A380 orders, he said, while acknowledging “the very large aircraft category is a weak category.”
Additional jetliner bookings this year will also come from a decision to introduce an upgraded version of the A330 widebody at the Farnborough air show this month, Mr. Enders said. The world’s second-largest plane maker secured $75.3 billion in deals at the event.
The so-called A330neo is due for delivery from late 2017 and promises 14% greater efficiency over the existing model largely by adding new engines from Rolls-Royce Holdings RR.LN +0.38% PLC.
The A330 has been an important contributor to Airbus profit, but the existing version was starting to run short of orders as more fuel-efficient planes such as the Boeing Co. BA -0.60% 787 Dreamliner entered the market. Airbus has won 127 commitments for the A330neo jet and it projects demand to top 1,000 aircraft.
To help boost profit, Airbus has embarked on a wide scale restructuring, including integrating its defense and space units to help lift profitability. Those efforts are progressing well, Mr. Enders said.
As part of its restructuring plan, Airbus said it is studying disposal options for its nonvoting share in Dassault Aviation SA, AM.FR +1.66% the maker of business aircraft and the Rafale combat jet. Airbus has a 46% stake in the company. The French government has the right of first refusal on the disposal of some or all of the stake.
“We want to monetize that participation,” Mr. Enders said. “It is not a question of if it is a question of when,” he said. Airbus has faced investor pressure to shed the stake which Mr. Enders saying the company was “actively engaging” on the issue.
Airbus maintained its full-year guidance of moderate returns on sales growth this year while reaching 7% to 8% returns in 2015, not counting development costs of the A330neo. Those will crimp return on sales next year, the company said when it launched the project.
The world’s second-largest plane maker, like rival Boeing, relies heavily on titanium from Russia to make its jets. Mr. Enders said the company’s relationship for titanium raw material and forgings from VSMPO, the world’s biggest titanium supplier, is stable.
“I do not expect the flow of it will be cut off short of all-out war,” Mr. Enders told analysts on a call as the European Union imposes further sanctions on Russia over the country’s efforts to destabilize Ukraine. Airbus is exploring potential mitigation action to protect against supply disruptions.
Airbus’s newest long-range jetliner, the A350, is in its final test phase before regulators signoff on the design, clearing the way for the first jet to be delivered to lead-operator Qatar Airways Ltd. before year-end. “The A350 program remains challenging,” Airbus said in the statement, though certification for safety authorities remains on track for this quarter.
– WALLSTREET JOURNAL
Shell Nigeria Exploration and Production Company Limited (SNEPCo) has welcomed efforts to promote safe helicopter services across Africa in a proposed Regional Action Plan (RAP).
The plan, according to a company statement, is the highlight of a workshop organised in Lagos within the week by the Aviation subcommittee of the International Association of Oil and Gas Producers (IOGP) in partnership with London-based safety advocacy group, HeliOffshore.
Biztellers reports that the two-day Offshore Helicopter Industry Safety Workshop (OHISW) with the theme “Developing a Regional Action Plan,” followed on from a similar session last year which SNEPCo sponsored.
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It also provided administrative and logistical support for this year’s conference which was sponsored by ExxonMobil. SNEPCo, which pioneered Nigeria’s deepwater production at Bonga in 2005, relies on helicopter shuttles for operations and supports the workshop as part of its contributions towards safe services in Nigeria.
In an address at the opening session delivered by General Manager Contracting and Supply Chain, Charles Oranyeli, Managing Director SNEPCo, Ronald Adams said: “By developing a regional action plan, we can move beyond dialogue to alignment, ensuring that the safety leadership, industry standards, and collaborative approaches championed last year are embedded in a common roadmap for collective improvement. The most effective solutions will come not from isolated efforts, but from partnership, standardization, and coordinated action across the region.”
The workshop was attended by more than 80 representatives from oil and gas companies, the Nigerian Content Development and Monitoring Board (NCDMB), the Nigeria Civil Aviation Authority (NCAA), the Nigerian Safety Investigation Bureau (NSIB), helicopter operators and original equipment manufacturers.
The event concluded with participants deciding action items for the proposed Regional Action Plan including Search and Rescue (SAR) initiatives, implementation of IOGP Report 690 standards and establishment of formal industry leadership forums.
The IOGP has been active for over 50 years, supporting its more than 90 members around the world to promote “excellence in safe, efficient and sustainable energy.”
The Airline Operators of Nigeria (AON) has declared that airlines operating in Nigeria have come under financial pressure following a sharp increase in the price of Jet-A1, also known as aviation fuel.
According to the group, the price of aviation fuel, has surged to about N1,800 per litre in many parts of the country, from about N1,000 per litre two weeks ago. This amounts to almost an 80 per cent increase within a short period.
Aviation fuel remains the largest cost component in airline operations, accounting for about 30 to 35 per cent of total operating expenses.
Industry stakeholders have linked the latest spike to the ongoing conflict in the Middle East, which has pushed up global energy prices.
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Speaking on Channels Television on Friday, the spokesperson for the Airline Operators of Nigeria, Prof Obiora Okonkwo, said the surge had placed airlines under severe financial strain.
According to him, most carriers have so far refrained from immediately transferring the additional cost burden to passengers, despite the pressure on their operations.
“Two weeks ago, we were getting Jet-A1 at about N1,000 per litre, which today is about N1,800, and even more in some stations. We have experienced an increase of about 80 per cent. That’s quite a spike,” Okonkwo said.
He explained that airlines were currently absorbing the losses in order to avoid worsening the economic burden on the travellers.
“We are not in a business where you can easily adjust your ticket price. Right now what we are doing is that we are bleeding. We are taking the blow. We are selling tickets at very non-profitable prices. We are losing a lot of money,” he said.
Okonkwo warned that the situation might not be sustainable if fuel prices continue to rise without government intervention.
“Obviously, adjustments will be expected anytime soon. But again, we are very sensitive to the economic situation of Nigerians and our travellers,” he added.
He noted that developments in the global oil market, particularly the recent release of reserve crude oil, could influence fuel prices in the coming weeks.
Okonkwo also urged the Federal Government to explore engagement with the Dangote Refinery as part of efforts to stabilise aviation fuel supply locally.
“We were more hopeless in a situation where there was no refinery in Nigeria in the last two years. Now that we have a refinery, we are hopeful that we can find a solution around it,” he said.
According to him, if the spike persists, some airlines may struggle to continue absorbing the losses associated with the rising cost of aviation fuel.
Meanwhile, the AON spokesperson also reacted to the decision by the Federal Competition and Consumer Protection Commission to sanction about five airlines over alleged price fixing.
Okonkwo said while the commission has regulatory powers, the aviation sector remains deregulated, making coordinated price fixing unlikely.
“There is no meeting of airlines where they agree to fix prices. Fixing prices would mean operating as a cartel, and that is not the case,” he said.
He explained that airline ticket pricing varies widely because different aircraft types attract different operating costs.
“Each airline determines its fares based on its own operational costs,” he said.
Okonkwo added that airlines must also demonstrate financial viability to regulators as part of the conditions for maintaining their operating licences.
“At every point in time, you must prove to the regulators that you are financially viable and capable of sustaining operations,” he said.
He urged regulators to take into account the fragile nature of the aviation industry when making policy decisions affecting airlines.
An Air Peace flight from Lagos to Port Harcourt has suffered a disruption, after the aircraft was affected by a bird strike on arrival at the Port Harcourt International Airport.
The airline made the disclosure on Thursday in a statement signed by its spokesperson, Osifo-Whiskey Efe.
He added that the incident necessitated safety checks on the affected aircraft and the deployment of another aircraft to convey passengers on subsequent flights.
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“We deeply empathise with passengers affected by this unforeseen incident and are working diligently to minimise disruptions,” Efe said.
The latest incident adds to the growing challenge of bird strikes faced by local airlines.
In December 2025, Air Peace disclosed that it recorded 49 bird strikes across Nigeria between January and September, stressing that even a single strike could ground an aircraft for weeks.
Chairman and Chief Executive Officer of the airline, Allen Onyema, had said on Arise TV that bird strikes constituted a major operational challenge, often leading to costly repairs and serious disruptions to flight schedules.
“One bird strike could cripple your aircraft for the next month. At that moment, there is no two ways about it. These bird strikes often lead to costly delays and serious disruptions in flight schedules,” he said.
He added that losses from such incidents compound other challenges facing Nigerian airlines, including heavy taxation and operational constraints.
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