Airbus is priced on one number: aircraft deliveries. We rebuilt the adjusted EBIT distribution. On our numbers the dollar moves the year about as much as the factory does. It rarely comes up on the call.
// figures from public reports, rounded · estimates and ranges are ours, not the company's · not investment advice
There is one number in European aerospace that everyone knows: the delivery target. Around 800 aircraft guided, mid-700s delivered in recent years. Engines and the supply chain are named as the constraint every quarter, but never quantified. Analysts update one cell and move on.
Deliveries matter this much for a simple reason. The cost base is built for a production rate the plants have not reached yet. Each aircraft that slips falls almost fully through to EBIT, because the cost was already spent. The focus on deliveries is right. It is just not complete.
Rounded: revenue about €69bn, adjusted EBIT guided around €7bn. Commercial aircraft does most of the work. Helicopters, defence and services steady the base. The guide is one number for deliveries and one number for EBIT. No band, no odds. And little on currency, for a company that sells in dollars and pays much of its cost in euros. The hedging policy is in the filings, not on the guidance slide.
Adjusted EBIT = aircraft contribution (deliveries × FX × margin pool) + other businesses − fixed and central costs. Plan: €7.0bn, matching the guide. Our ranges:
| Driver | Plan | Range | Shape | Why |
|---|---|---|---|---|
| Deliveries | index 1.00 | −8% … +2% | triangular | downside is structural (engines); upside is capped by the factory |
| USD effect | index 1.00 | ±4% (90% conf.) | normal | dollar revenue, euro costs, hedged in layers but never fully |
| Services & other | €4bn pool | −3% … +3% | uniform | steadier; ρ +0.2 with deliveries |
Look at the first row. A −8% … +2% range means the guided number sits near the top of its own range, not in the middle. That one asymmetry does most of the work in this note.
Hedging is in the model. Airbus runs one of the largest corporate currency hedge books there is, layered several years ahead at known rates. The ±4% dollar range is the residual after that book, not the spot move, which is about twice as wide in a normal year. So the base case is the hedged case, and even after the hedge the dollar matches the factory for variance. Deliveries cannot be hedged at all. An engine that does not arrive is a cash slip no bank will write a contract on.
Guided EBIT versus the simulated range
Adjusted EBIT, €bn. Blue bar: P10 to P90. Dot: P50. Dashed line: the guided €7.0bn.
The guide sits above the P50. Roughly seven years in ten land below it.
A three-in-ten guide. That is not unusual. It is what happens when the guided number is the good end of a skewed range.
What moves the year
Share of the total EBIT swing, one driver at a time between its P10 and P90.
The dollar and the factory carry about the same weight. Only one of them gets an hour on the call.
Both statements are true, and they are different statements. Deliveries own the headline events: a supplier problem, a lost quarter. The dollar owns the day-to-day variance. It works on every delivered aircraft, all year, in both directions. The market spends an hour a quarter on the first and prices the second from a footnote.
Who sets the driver
The same swing as above, grouped by who sets the driver. Bars: share of the total swing.
Only 15% of the swing sits in lines Airbus fully runs itself.
The dollar is set in the market. The delivery count is set, in practice, by the engine makers. What management controls is the response: the hedge ratio and how far out it reaches, the terms suppliers face when they miss, and the delivery mix. The quarterly call spends its hour on the 40% and almost none on the 45%.
Bear (P10, about €6.4bn): a five-percent delivery shortfall and an unhelpful dollar. Neither is a tail event. Together they take several hundred million off EBIT while the cost base stays put.
Base (P50, about €6.8bn): a normal year of slippage. That is a €200m miss against the guide, built into the shape of the delivery range.
Bull (P90, about €7.2bn): the factories hold the rate and the dollar helps. The ceiling is close, because the order book is sold out for years. You cannot deliver aircraft you have not built.
Confine deliveries to −8% … −3%. Everything else unchanged, same seed.
Chance of holding €7.0bn
Same model, same seed. Only the delivery range changes.
In the miss case the P10 falls to €6.2bn.
A delivery miss does not dent the guide. It removes it. Costs are committed, so there is no cushion. Two numbers say what four quarters of analyst questions rarely get to.
An aircraft is paid for on delivery. A slipped aircraft is a cash slip too, and the cost of building it was spent months earlier. So the delivery range is also the working-capital range. The dollar works the other way: it changes what each delivery is worth in euros, and the hedge book decides how much of that reaches cash this year.
What hedge ratio and average rate covers next year's dollar book? At what delivery count does the EBIT guide break? Which moves your internal P10 more: twenty aircraft, or five cents on euro-dollar? The third one is the tell. On our numbers the answer is the currency. If so, the quarterly deliveries debate is pricing the wrong risk.
The most-watched driver and the most important driver are often not the same. Every business has a number everyone counts, because it is public and easy to count. Often a quieter variable, a currency or a commodity, matches it for risk. A distribution makes the quiet one visible. It was never small. It was just quiet.
// method: simplified driver model, plan values tuned to public accounts; 10,000 Monte Carlo scenarios per run through the ScenarioCast engine, correlations and hedges as stated in the model section; sensitivities one-driver-at-a-time at marginal P10/P90; what-ifs re-run on the same seed. Figures rounded. Our estimates, not the company's. Not investment advice.