WARSAW, Poland — Airbus Defence and Space saw its revenue decline in 2016 thanks in part to a 2.21 billion euros ($2.32 billion) charge on Europe’s troublesome A400M military transport aircraft program, but the division’s order intake was up over the prior year.
“It was not an easy year,” Airbus chief executive Tom Enders said Feb. 22 during a press conference to announce the company’s full-year results. “But I think we demonstrated a very strong industrial performance.”
The issues related to the A400M program which, according to Airbus, “remains an area of concern,” dominated the conference, but the European group included three of its space projects among last year’s highlights. These comprised the launch of the first satellite of the SpaceDataHighway program, the finalization of the Airbus Safran Launchers joint venture, and the completion of the 76th successful launch by Ariane 5 satellite launch vehicle.
The SpaceDataHighway is to use space-based lasers to speed data between Earth observation satellites, unmanned aerial vehicles (UAVs) and aircraft, and ground stations in Europe, using the European Data Relay Satellite (ERDS) geostationary satellites as relay towers.
On Feb. 17, Ariane 5 completed its 77th flight to put two telecommunications satellites on geostationary transfer orbit. The group’s next-generation launcher Ariane 6 is scheduled for a first test flight in 2020.
The finalization of the Airbus Safran Launchers joint venture, which is developing Ariane 6, enabled the transition to the new entity from the two parent companies. The July 30 consolidation also allowed Airbus to report a net capital gain of 1.175 billion euros.
Airbus said that Defence and Space showed strong order momentum in satellites and military aircraft.
“The space business is doing very well,” Enders commented, hinting at the fact that the division reported a book-to-bill ratio of above one, as more orders were received than filled last year.
Annual revenues down as order intake climbs
This said, a look at the division’s results for last year reveals a more complex picture. Defence and Space reported revenues of 11.8 billion euros for 2016, down 9.4 percent compared with a year earlier. Space systems represented 31 percent of the external revenue split, preceded by military aircraft, at 42 percent, while communications, intelligence and security accounted for the remaining 27 percent of the division’s revenues for last year. Airbus said the division’s 2016 results were negatively impacted by a portfolio reshaping of about 1 billion euros.
On a positive note, the Defence and Space division posted a higher order intake for 2016, at some 15.39 billion euros, up 6.6 percent compared with a year earlier.
Meanwhile, last December’s meeting of the European Space Agency’s ministerial council spurred hopes by Airbus management that Defence and Space would be ensured a steady order book, which totalled 41.5 billion euros in 2016, in the coming years. The council committed to invest a total of 10.3 billion euros in space activities in the forthcoming years to help ensure Europe “remains a strong, independent and competitive player” in the sector.