College of Management and Technology,

South Valley, Finance Department

Company Valuation Analysis

(Applied on Airbus)

Graduation Project submitted to AASTMT in partial fulfillment requirements for the

award of Bachelor degree

In

Business Administration

Submitted By:

Areej Medhat Metawa Ahmed

Mark Sameh Fatma Elzahraa Bahaa
Fadi Elia Aghapy Isaac

Supervised By

A.Professor Dr.Wael Moustafa

Vice Dean
Faculty of Financial and Administrative Sciences

Pharos University in Alexandria

June 2023
Table of Contents
1. .Introduction………………………………………………………………………………………………………………………………….5
1.2Abstract: .................................................................................................................................................................................. 6
2.Market analysis ......................................................................................................................................................................... 7
2.1Introduction about market data ............................................................................................................................................... 7
2.2Company overview ................................................................................................................................................................. 7
2.3.Mission- ................................................................................................................................................................................. 7
2.4. Vision-................................................................................................................................................................................... 7
2.5.Marketing mix........................................................................................................................................................................ 8
2.5.1.Product mix ......................................................................................................................................................................... 8
2.5.2.Price/pricing mix................................................................................................................................................................. 8
2.5.3.Place and distribution mix ................................................................................................................................................... 9
2.5.4.Promotion & Advertising mix ............................................................................................................................................. 9
2.6.SOWT Analysis ..................................................................................................................................................................... 9
2.6.1.Strengths of airbus .............................................................................................................................................................. 9
2.6.2.Weaknesses of airbus ........................................................................................................................................................ 10
2.6.3.Opportunity for airbus ....................................................................................................................................................... 10
2.6.4.Threats of airbus................................................................................................................................................................ 11
2.7.Demand ................................................................................................................................................................................ 11
2.8.Global market Forecasting ................................................................................................................................................... 11
2.9.market Trends ...................................................................................................................................................................... 11
2.10.Market strategy .................................................................................................................................................................. 12
2.11.Competition........................................................................................................................................................................ 12
2.11.1.AIRBUS VS BOEING.................................................................................................................................................... 12
2.11.2.COMMERCIAL AIRBUS .............................................................................................................................................. 13
2.11.3.PASSENGER.................................................................................................................................................................. 13
2.11.4.COMMERCIAL BOEING ............................................................................................................................................. 13
2.11.5.PASSENGER.................................................................................................................................................................. 13
2.12.Competitive analysis .......................................................................................................................................................... 14
2.13.Market analysis in the Marketing strategy of Airbus ......................................................................................................... 14
2.14.competitive advantage in the Marketing strategy of Airbus .............................................................................................. 14
2.15.Brand equity in the strategy of Airbus –market share ....................................................................................................... 15
2.16.Airbus Porter Five Forces Analysis in commercial sector ................................................................................................. 15
2.16.1.New Entrant Threat: (low) .............................................................................................................................................. 15
2.16.2.Threat of Substitutes: (low)............................................................................................................................................. 15
2.16.3.Bargaining Power of Customer (high) ............................................................................................................................ 15
2.16.4.Bargaining Power of Suppliers) low(.............................................................................................................................. 16
2.16.5.Competitive Rivalry: (low) ............................................................................................................................................. 16
2.17.Test analysis ....................................................................................................................................................................... 16
2.17.1.Test service ..................................................................................................................................................................... 16
2.17.2.Airbus testing portfolio ................................................................................................................................................... 16
2.17.3.Test center and facility development .............................................................................................................................. 17
2.17.4.Environment test ............................................................................................................................................................. 17
2.17.5.Flight test benefit ............................................................................................................................................................ 17
2.18. Airbus PESTELE Analysis ......................................................................................................................................... 17

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2.18.1.Political factors ............................................................................................................................................................... 17
2.18.2.Economic factors............................................................................................................................................................. 17
2.18.3.Social factors ................................................................................................................................................................... 18
2.18.4.Technological factors ...................................................................................................................................................... 19
2.18.5.Legal actors: .................................................................................................................................................................... 19
2.18.6.Environmental factors ..................................................................................................................................................... 19
2.19.BCG matrix in the Marketing strategy of airbus................................................................................................................ 20
2.20.Financial Market Risks ...................................................................................................................................................... 20
2.20.1.Global Economic Conditions .......................................................................................................................................... 20
2.201.Business-Related Risks .................................................................................................................................................... 20
3. Economic analysis: ................................................................................................................................................................ 21
3.1.GDP in France...................................................................................................................................................................... 21
3.2.GROWTH RATE FOR GDP ............................................................................................................................................... 22
3.3.Growth rate calculation and formula ................................................................................................................................... 22
3.4.Real GDP FORMULA ~ Nominal \ (1+inflation rate ) ...................................................................................................... 23
3.5.Industry, Value Added (% Of GDP).................................................................................................................................... 24
3.6. AIRBUS AND FRANCE’S GDP ....................................................................................................................................... 25
3.7.GDP per capita ..................................................................................................................................................................... 25
3.8.INFLATION ........................................................................................................................................................................ 26
3.9.Unemployment..................................................................................................................................................................... 26
3.10. Airbus and unemployment in France ................................................................................................................................ 27
3.11Tax Rate .............................................................................................................................................................................. 28
3.12.. Airbus Group Income Taxes ............................................................................................................................................ 28
3.13.Interest rate......................................................................................................................................................................... 29
3.14.EXCHANGE RATE .......................................................................................................................................................... 29
3.15. Economic activity and the labour market ......................................................................................................................... 29
Exchange Rate with the famous currencies…………………………………………………………………………………...30
3.16.Credit Ratings for airbus .................................................................................................................................................... 31
3.17.Credit Ratings .................................................................................................................................................................... 32
3.18. Credit ratings for France ................................................................................................................................................... 32
3.19. Foreign Direct Investment in France ................................................................................................................................ 33
3.20.What to consider if you invest in France ........................................................................................................................... 33
3.21.Government Measures to Motivate or Restrict FDI........................................................................................................... 33
3.22.FDI in airbus ...................................................................................................................................................................... 34
3.Financial analysis…………………………………………………………………………………………...……………….34

4.1. The average number of shares in airbus company………………………………………………………………………..34

4.2.Gasoline price in the last 15 years and impact that in airbus…………………………………...…………………………35

4.3.the demand and supply of airbus products the last 15 years………………………………………………………………36

4.4.Airbus in financial markets………………………………………………………………………………………………..37

4.6.Costs and salaries…………………………………………………………………………….……………………………38

4.7.How Much Do Airbus Aircraft Cost? ……………………………………………………………………….……………39

4.8. Airbus Salaries……………………………………………………………………………………………………………40

4.9. Weakness points and solutions…………………………………………………………………………..………………41

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4.10.Delays in delivery……………………………………………………………………………….………………………41

4.11. More details about Delays in delivery………………………………………………………………………………….42

4.12.Operational defects and inefficiencies……………………………………………………………………………….….43

4.13.High production costs…………………………………..……………………………………………………….………44

4.14.Crisis affected airbus……………………………………………….……………………………………………..…….44

4.15. Financial analysis………………………………………………………………………………………………..….…48

4.15.1. financial projection …………………………………………………………………………………………………..48

4.16. financial ratios……………………………………………………………………………………………….……..…..50

4.17.FCF………………………………………………………………………………………………………………...……55

4.19. residual income……………………………………………………………………………………………………..….58

5.Recommendations…………………………………………………………………………………………………………..59

6.Conclusion…………………………………………………………………………………………………………………61

7. References…………………………………………………………………………………………………………….…..62

List of figures & charts:

Figure 1 GDP ........................................................................................................................................................................... 22

Figure 2 Growth rate ................................................................................................................................................................. 22
Figure 3 Growth rate .................................................................................................................................................................. 23
Figure 4 Real GDP ..................................................................................................................................................................... 24
Figure 5 GDP industry .............................................................................................................................................................. 24
Figure 6 GDP Per captal .......................................................................................................................................................... 25
Figure 7 inflation ...................................................................................................................................................................... 26
Figure 8 unemployment ........................................................................................................................................................... 27
Figure 9 tax rate ........................................................................................................................................................................ 28
Figure 10 airbus tax .................................................................................................................................................................. 28
Figure11 intrest rate ................................................................................................................................................................... 29
Figure12 Excange rate ............................................................................................................................................................. 30
Figure 13 stock………………………………………………………………...………………………………………………35

Figure 14 Gasoline Price………………………………………………………………………………………………………36

Figure 15Orders &Deliveries…………………………………………………………………………………………………37

Figure 16 Airbus in financial markets………………………………………………………………………………………...37

figure 17 net income………………………………………………………………………………………………………….38

Figure 18 salary average……………………………………………………………………………………………………...41

Figure 19 Production Cost……………………………………………………………………………………………………44

Figure 20 income statement……………………………….…………………………………………………………………49

Figure 21blnce sheet…………………………………………………………………………………………………………49

Figure 22 cash flow……………………………………………….…………………………………………………………50

Figure 23 Liquidity ratios……………………………………………………………………………………………………51

Figure 24 Activity ratio……………………………………………………………………………………………………..52

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Figure 25 Profitability ratio……………………………………………………………………………………………………53

Figure 26 operating cycle…………………………………..……………………………….…………………………………54

Figure 27 FCF………………………………………………………………………………………………………………….55

Figure 28 FCF best case……………………………………………...………………………………………………………..56

TABLE 28 FCF worst case………………………………………………..………………………………………………….57

Figure 30 per share price……………………………………………………………………………………………………..58

Figure 31 residual income……………………………………………………………………………………………………58

List of tables:

TABLE 1INDUSTRYGDP…………………………………………………………………………….………………..…..24
Table 2 unemployment………………………………………………………………………………………………………..26

Table 3 tax rate…………………………………………………………………………………….………………………..…27

Table 4 interest rate………………………………………………………………………………………………………...….29

Table 5 EXCHANGE RATE……………………………………………………………………………………………..…...29

Table 6 Exchange Rate with the famous currencies…………………………………………..……………………………….30

Table 7 Credit Ratings…………………………………………………………………………………………………..……..32

Table 8 Credit ratings for France………………………………………..……………………………………….……….……32

Table 9 FDI in airbus…………………………………………………….……………………………………………….……34

TABLE 10 average number of shares in airbus………………………………………………………………………...……..34

TABLE 11 Gasoline Price………………………………………………………………………………………………..……35

TABLE 12 orders…………………………………………………………………………………………………...…………36

TABLE 13 Costs and salaries………………………………………………………………………………………………….38

TABLE 14 delays in delivery………………………………………………………………………………………….…..….42

TABLE 15 Production Cost…………………………………………………………………………………………..………44

TABLE 16 income statement………………………………………………………………………………………..………..49

TABLE 17 balance sheet……………………………………………………………………………………………….…….49

TABLE 18 cash flow…………………………………………………………………………………………………………50

TABLE 19Liquidity ratios……………………………………………………………………………………………………50

TABLE 20 Activity ratio………………………………………………………………………………………….………..…51

TABLE 21 Profitability ratio…………………………………………………………………………………………………..52

TABLE 22 operating cycle…………………………………………………………………………………………….………54

TABLE 26 FCF………………………………………………………………………………………………………………..55

TABLE 27 FCF best case……………………………………………………………………………………………….…….56

TABLE 28 FCF worst case……………………………………………………………………………………………………57

TABLE 29 per share price……………………………………………………………………………………………………..58

TABLE 30 residual income……………………………………………………………………………………………………59

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 1.Introduction

. In today's competitive global market, accurate company valuation plays a pivotal role in
assessing the financial health of organizations and aiding investment decisions. This graduate
research project aims to conduct a comprehensive analysis of Airbus Co., a leading
multinational aerospace corporation, focusing on its valuation methods and the factors
influencing its financial performance.
Airbus Co., established in 1970, has emerged as a prominent player within the aerospace
industry. The company designs, manufactures, and sells civil and military aircraft, as well as
providing related services. With a diverse product portfolio and a strong global presence,
Airbus Co. has experienced significant growth and has become a key competitor to its
counterparts.
The valuation of a company is crucial for various stakeholders, including investors,
shareholders, and financial analysts. Understanding the true worth of a company can assist in
determining its intrinsic value and gauging its potential for growth and profitability. In the case
of Airbus Co., an accurate company valuation will provide valuable insights to support
investment decisions and strategic planning.
This research project will explore multiple valuation methods to gain a comprehensive
understanding of Airbus Co.'s financial standing. Valuation techniques, such as discounted cash
flow analysis, relative valuation, and the use of market multiples, will be employed to assess
the company's financial performance and competitiveness within the aerospace industry.
Additionally, this research will delve into the key factors influencing Airbus Co.'s valuation.
Factors such as market trends, economic conditions, competitive landscape, technological
advancements, and regulatory changes will be examined to identify their impact on the
company's financial position.
The research outcome will not only contribute to our understanding of company valuation but
will also provide valuable insights into the specific case of Airbus Co. The findings will be
significant for potential investors, financial analysts, and industry professionals who have a
vested interest in assessing and understanding the financial health of Airbus Co. The research
will contribute to existing knowledge in the field and can serve as a basis for further analyses
and investment strategies in the aerospace industry.
This graduate research project will delve into the company valuation of Airbus Co., an industry
giant within the aerospace sector. By adopting various valuation methods and examining the
influential factors, the project aims to provide a comprehensive analysis of the company's
financial standing. The findings will contribute to the broader understanding of company
valuation and offer valuable insights into Airbus Co.'s performance within the global market.

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 1.2. Abstract:

The main purpose of this study is to identify and forecast market data and economic conditions
and future performance of the company. The other purpose of this study is to provide
suggestions to investors to buy shares in Airbus.
Airbus Company is a company that manufactures airplanes in the aerospace sector. The
corporation was founded in 1970 as a European cooperative, with its headquarters in France.
Internal and external stakeholders exist in the firm. Staff and suppliers are internal stakeholders,
whereas passengers, businesspeople, and the government are external stakeholders. The most
influential stakeholders are an executive committee and partners, who own around 30% of the
company. Partners control 20% of the company. Airbus Company does commerce on an
international scale. It manufactures and distributes both military and commercial aerospace
equipment. Furthermore, the corporation has established production facilities in Franca, Spain,
Germany, and the United Kingdom, as well as subsidiaries in North America, Japan, and China.
The company's products are organized into three categories: helicopters, military and space,
and commercial planes. In terms of helicopter deliveries and income creation, Airbus is placed
third in the Aerospace sector. Airbus employs a diverse workforce of more than 80
nationalities. The company's core human talent, hard work, and missions retain it as a market
leader in competitive areas. Furthermore, the corporation employs around 130,000 people from
over 100 different nationalities and 180 location. This cultural variety is a major reason for the
company's recent success. ( airbus)
It is notable that this research focuses heavily on the commercial airplane sector only.
The method used to collect information is the secondary method through the World Bank,
Macro Tend and the official Airbus website.
Market and economic information such as marketing mix is discussed in this study. Demand
Analysis, Financial Forecasts, Market Strategy, Global Market Forecasting, Airbus PESTALE
Analysis, Airbus CSR target. GDP , Exchange Rate , and FDI.In the end, information is
provided to investors they want to know the actual state of the company and then decide
whether to invest or not.

Keywords: Airbus, GDP France, FDI, economic growth, Demand Analysis, Financial, Market
Strategy.

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 2. Market analysis

2.1. Introduction about market data

Airbus and Boeing are the two leading important companies in the aircraft manufacturing
business, which was recently identified as one of the largest in the world. The majority of major
rivals failed to sustain quick competition and exited the sector. For example, McDonell
Douglas Corp merged with Boeing Company in 1997, putting Boeing and Airbus in a global
duopoly (Kovacic 2008, p.903). Evidently, it is critical to analyse both the external and internal
industry environments in order to evaluate what Airbus has done and should do in order for the
industry to achieve initial growth and survive competing forces. As a result, the research strives
to identify and analyse Airbus Company's issues, possibilities, and hurdles to organisational
development, as well as tactics that the company has lately implemented to expand its activities
to other nations.

2.2.Company overview
Airbus Company is a company that manufactures aeroplanes in the aerospace sector. The
corporation was founded in 1970 as a European cooperative, with its headquarters in France.
Internal and external stakeholders exist in the firm. Staff and suppliers are internal stakeholders,
whereas passengers, businesspeople, and the government are external stakeholders. The most
influential stakeholders are an executive committee and partners, who own around 30% of the
company. Partners control 20% of the company. Airbus Company does commerce on an
international scale. It manufactures and distributes both military and commercial aerospace
equipment. Furthermore, the corporation has established production facilities in Spain,
Germany, and the United Kingdom, as well as subsidiaries in North America, Japan, and China.
The company's products are organised into three categories: helicopters, military and space,
and commercial planes. In terms of helicopter deliveries and income creation, Airbus is placed
third in the Aerospace sector. Airbus employs a diverse workforce of more than 80
nationalities. The company's core human talent, hard work, and missions retain it as a market
leader in competitive areas. Furthermore, the corporation employs around 55,000 people from
over 80 different nationalities. This cultural variety is a major reason for the company's recent
success.( airbus.)

2.3.Mission - “To meet the needs of airlines and operators by producing the most
modern and comprehensive aircraft family on the market, complemented by the highest
standard of product support”
2.4. Vision- “To create better connected, safer, and more prosperous world”

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 2.5. Marketing mix

2.5.1 .Product mix

Airbus manufactures airplanes for every element of the aviation industry. It manufactures
airplanes for airline customers as well as business jets of any size and specification. It is also
involved in the development of military aircraft for multi-purpose operations all over the world.
The Airbus A320 is the world's first commercially successful digital semi-automatic aircraft,
while the A380 is the world's biggest passenger airliner. Airbus' primary product development
strategy is the introduction of several model sizes. The expansion in product range from 100 to
500 seats broadens the product offering. Airbus ensures timely delivery and product quality to
increase customer satisfaction. Let's have a look at the items available in the Airbus marketing
mix.( essay48)

• Passenger aircraft
These successful Families range in size from 100 to 600 seats: Airbus A320, A330, A340,
A350 XWB, and A380 aircraft families
• Corporate Jet
Airbus' ACJ Family contains business aircraft available in corporate, VIP, and government
aviation configurations. ACJNEO, ACJ318, ACJ319, ACJ321, ACJ330, ACJ340,
ACJ350XWB, and ACJ380 are members of the ACJ family.

• Freighter aircraft
The A330-200F, Beluga, and A330P2F freighters are available in general and express freight
markets. Aircraft: A330-200F, A330P2F, BELUGA A300-600ST
5.1.1. Recommended Product Strategy
should offer extra perks like warranties, shipping, credit, after-sales support, help lines, etc. to
customers who buy its items.
It ought to launch new products that follow the most recent market trends. It needs to locate
market opportunities and roll out new products that take advantage of them.
Before fully commercializing newly offered products, it should test them in test markets.

should upgrade the packaging of its products to make them easier to use and transport.
Additionally, it should have eye-catching packaging to make the customer attracted to it .

2.5.2.Price/pricing mix
Pricing in the aircraft manufacturing business is determined by rival strategy and market
demand. The pricing is also influenced by the buyer's specifications. Economies of scale also
assist businesses in lowering costs while increasing income. The price increase is computed
using Airbus' normal escalation algorithm, and it allows the company to remain profitable.
In business jets and passenger aircrafts, price is also affected by design weights, engine
selection, and the amount of customization chosen. Airbus has implemented a product
differentiation strategy. They have regularly introduced innovative features in their goods, such
as the new A380's double decker, four engines, and 853 passengers. As a result, there is a price
difference in the many customized modifications sought by aircraft clients.

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• It currently employs product bundle pricing as well, whereby products are grouped and sold
at discounts from the sum of the individual items' prices.
• For some items, it also employs an optional product pricing model, whereby it provides a
price for the base
2.5.2.1 .Recommended Price Strategy
should implement discounts and allowances, where prices are temporarily lowered to draw
customers and expand market share. It can achieve this by taking a certain amount off the cost
of its products.
2.5.3.Place and distribution mix
All aircrafts are delivered to the buyer's designated location by Airbus. Airbus has secured
orders from a number of carriers, including Malaysia Airlines, Lufthansa, Singapore Airlines,
Qantas Airways, Emirates, and others. Airbus operates sixteen significant locations in four
countries: France, Germany, Spain, and the United Kingdom. The final assembly
manufacturing of the corporation is headquartered in Toulouse, France, Hamburg, Germany,
Seville, Spain, and Tianjin, China.
The corporation has three subsidiaries: one in the United States, one in Japan, and one in India.
It has more than 500 outlets across the nation carrying its products. It employs an aggressive
marketing plan and seeks to have as many merchants carry its items as is practical. As a result,
clients can readily access the company's products in various regions of the nation.
2.5.3.1.Recommended Place Strategy
It should concentrate on making its online website easier to use and more user-friendly.
It should make sure that it uses personal selling to offer its products to major stores
2.5.4.Promotion & Advertising mix
Airbus advertises its aircrafts in air shows such as the Paris air show at Le Bourget. In recent
years, there has been a surge in global demand for planes as a mode of transportation at a high
cost. There has also been a rise in the number of airline operators. The need for high-efficiency
airliners has grown because of global traffic growth, rising prices, and environmental concerns.
This has resulted in rapid expansion in the sector. Airbus has also ventured into the military
transport aircraft market.
2.5.4.1.Recommended Promotions Strategy
We should begin an advertising strategy so customers receive a consistent message across all
media platforms. This will contribute to raising brand awareness in customers' minds.
You should implement a variety of digital marketing strategies to increase website visitors. The
creation of its blog, SEO, and banner advertising are a few of these.
You should begin gathering information on clients and sending them (essay48)

2.6. SOWT Analysis

2.6.1. Strengths of airbus
• Global Reach - Airbus has design facilities in multiple countries, including Germany,
the United Kingdom, France, and Spain.

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• Environmentally friendly - Airbus has also introduced Blue 5, which focuses on
environmental issues such as saving energy, reducing waste, lowering CO2, conserving
water, and lowering volatile organic compounds.
• Strong R&D - The company's key factors are research and development, and Airbus
spends billions of dollars yearly on R&D, which helps Airbus the most. Airbus' R&D
spending in 2020 was around 2.86 billion Euros. This commitment to product R&D
demonstrates the organization's commitment to growth and technical progress.
• Strategic Business Plan - Airbus' three core divisions are helicopters, space and defence,
and commercial aircrafts. The company has routinely excelled its opponents in missiles,
combat aircraft, low-cost carriers, and helicopters.
• •High gross market share - Airbus has a higher gross market share than its main rival
Boeing. Based on the number of units sold, it held a 58% market share in 2015,
compared to 42% for Boeing. It had a 55% market share in sales, whereas Boeing had
a 45% market share.( iide)

2.6.2. Weaknesses of airbus

• High Manuf acturing Expenses - AI RBUS has greater manuf acturing costs
than BOEI NG. The A 380, f or example, was d elayed f or over a year, raisin g
total manuf acturing costs and red ucing the AI RBUS group's share price by
26%.
• I ssues with critical services - Several of the company's important programs
have had problems. I ts vA350s are rid d led with f laws. Cabin items and a
number of other variables contribute to the d elays. By July 2016, just 8
A320 Neos had been d elivered , compared to an expected 30+. One of the
company's Super Puma helicopters crashed , causing issues in the helicopter
d ivision.
• The A380's popularity is d wind ling - Airbus anticipated the A380 to be a
big hit when it initially presented it. I t also had some short -term success,
but it was not as long-term as Airbus had planned . Several airlines have
cancelled their ord ers f or the A380. The number of A 380s manuf actured
each month is expected to be red uced to one.( iide)
2.6.3. Opportunity for airbus
• Technological Advancement - The aviation industry has experienced significant
technological advances in recent years. This can help AIRBUS resolve issues and
provide solutions faster.
• Increased travel demand - Aside from the 2020 pandemic, there has been an increase in
demand for air travel in recent years. Aside from Millennials, middle-class and
professional customers favor air travel over other modes of transportation. This demand
is expected to grow during the next fifteen years.

• Better economic situations - The recession is past, and the global economy has
recovered. Globally, the job situation has improved, which has resulted in increasing
expenditure on tours and travel. Another factor driving growth in the aviation business
is the rise of the middle class.( iide)

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 2.6.4. Threats of airbus
• Loss of market share - Russia and China intend to build their own commercial aircraft,
placing AIRBUS in peril. China is on course to surpass the United States as the world
leader in air passenger traffic and declining to engage in such a market would harm
AIRBUS' business.
• Regulatory burden - The regulatory load on aircraft manufacturers and airlines has
increased. Several laws and regulations, ranging from passenger safety to other
challenges, place immense strain on Airbus. There are financial challenges, such as
using third parties to finalize deals overseas, which can make compliance complex and
unpleasant.( iide)

2.7. Demand
Airbus expects demand for 39,490 new passenger and cargo aircraft over the next 20
years in its 2022 Global Market Forecast. Airbus attributed the increase in 2022
projection to rising demand for the newest technologies and fuel-efficient aircraft to
replace older jets. The prediction is also influenced favorably by 2021, an
extraordinarily poor year for aviation that falls outside of the 20-year forecast range
(airbus.com)

2.8. Global market Forecasting

Aviation linkages help commerce and business, governments, and education, while air cargo
transports 35% of international trade by value, including aid to global health systems. People
also desire and require (re)connection with family and friends.
The GMF2022-2041 is based on a set of energy costs and macroeconomic assumptions that
primarily mirror the International Energy Agency STEPS (Stated Policies Scenario), including
SAF requirements and stated CO2 pricing.

Over the next 20 years, Airbus predicts that passenger traffic will expand by 3.6% per year
(2019-2041 CAGR - Compound Annual Growth Rate).
Airbus predicts a need for 39.490 new passenger and cargo aircraft during the next 20 years,
with 31.620 being single-aisle aircraft and 7.870 being widebody aircraft.
Over the next 20 years, the demand for freighters is estimated to reach 2,440 aircraft, with
approximately 900 of them being produced new. Only 20% of the existing fleet is comprised
of the most recent generation of fuel-efficient aircraft. One of the most easy ways to
decarbonize the sector is to replace older generation airplanes.(airbus)

2.9.market Trends
In 2021, the narrow-body aircraft category had the biggest market share. Due to their benefits
including cheap operating costs and fuel economy on short-haul routes, newer generation
narrow-body aircraft have seen a huge increase in demand in recent years. This is a result of
the success of the low-cost carrier business model. Longer flight distances are now possible
with the more recent generation of narrow-body aircraft thanks to technological developments.
while 533 narrow-body aircraft were supplied by Airbus (484 aircraft delivered in 2020).
Considering that the aircraft will resume service by the end of 2020, B MC-21 and COMAC
C919 model deliveries are anticipated to begin in 2022 )(airbus)
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 2.10.Market strategy
Four strategic priorities form the foundation of the Airbus Strategy and will help the company
fulfil its mission. These strategic goals emphasis geopolitics, sovereignty, adaptability, and
sustainability.

Priority 1: Develop Airbus as a pioneer in aerospace and defines The Company will be able
to expand in the future only if it keeps innovating both within and around its current portfolio
as well as when developing the following generation of goods and services.
Priority 2: Take use of your European heritage to expand globally, The Company has
developed from its European roots over the past 50 years to become the most diverse and global
aerospace and defence company. When approaching international markets, this is a crucial
strength.
Priority 3: Boost the ability to make investments for the future The COVID-19 epidemic was
the company's worst catastrophe ever, forcing it to priorities short-term cash containment. Its
potential to remain competitive over the long run will depend on how well it can combine
growth, profitability, and toughness.

Priority 4: Take the lead in transforming the aerospace sector Carbon emissions can be
reduced in a significant way. Airbus SE will take the lead in the aerospace industry's transition
to a low-carbon economy while also adhering to new international environmental, social, and
governance criteria (marketing91)

2.11. Competition

2.11.1.AIRBUS VS BOEING
The rivalry began when Airbus was founded to consolidate the fragmented European aerospace
sector in 1969. They have been slowly growing their market share ever since, while Boeing
bought out and or out-competed other U.S. firms, leaving the two as the only major commercial
aircraft manufacturers.

As the worldwide travel market expanded from just over 400,000 travellers in 1973 to 3.96
billion in 2016, Airbus and Boeing fought to gain market share in the rapidly growing industry,
competing at every level over who would get the largest slice the rapidly-growing pie.
Today, both companies are using every advantage they can find, driving innovation and
efficiency. Boeing and Airbus each control around half of the global aircraft market, and
analysts anticipate the booming travel industry needing as many as 39,000 new planes over the
next 20 years. With a value of over $6 trillion over two decades, even small differences in
market share add up to big business, so it is no wonder competition is so fierce.
One of the main ways Airbus has clawed valuable ground away from Boeing has been the
success of mid-range models like the A340 and A320Neo, the latter of which currently enjoys
a 59% market share in its class1. This leads us to the first way the rivalry of these two
companies and the new aircraft technologies they are developing is reshaping the air travel
industry. That is, the changing shape of airline fleets themselves, and the types of planes you
are likely to fly on.

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No matter who is flying, whether it is VIPs or government officials, frequent-flying business
passengers or vacationers jetting off for a well-deserved break, passengers can relax knowing
that every aspect of an Airbus aircraft has been designed to be as comfortable, efficient and
innovative as possible – creating pleasant environments for passengers, pilots and crew.
( mordorintelligence)

2.11.2.COMMERCIAL AIRBUS
Ranging in size from 100- to 850-seat aircraft, the versatility of Airbus’ product line allows it
to offer a variety of tailored solutions to meet the needs of any airline and their market – from
low-cost and full-service carriers to the air freight and VIP transport segments – while
continuously ensuring the very best in efficiency and experience

2.11.3.PASSENGER
The company’s product line of passenger aircraft is characterised by the highest standards of
comfort, unrivalled economics and versatility with a commitment to progressively reduce
emissions for a more sustainable aviation industry. Airbus’ A320 Family is the undisputed
leader in the single-aisle category, now joined by the A220 Family; while the twin-engine
A330 Family can cover long-range requirements. The double-deck A380 is the largest Airbus
aircraft and introduced many key innovations that are now embedded in the latest generation
of aircraft.
The A350 epitomises Airbus’ five decades of experience and expertise in shaping the future of
air travel. By creating an aircraft family that meets market requirements for size, range, revenue
generation, passenger comfort and the environment, Airbus has delivered a new-generation
passenger aircraft that is at the pinnacle of modern aviation.ER

2.11.4.COMMERCIAL BOEING
Boeing Commercial Airplanes is committed to being the leader in commercial aviation by
offering airplanes and services that deliver superior design, efficiency and value to our
customers and a superior flying experience to their customers. Today, there are more than
10,000 Boeing commercial jetliners in service; airplanes that fly farther on less fuel, airplanes
that reduce airport noise and emissions, airplanes that provide passenger-preferred comfort
while delivering superior bottom-line performance to operators. Leadership for today and
tomorrow. That's a better way to fly.

2.11.5.PASSENGER
Released in 2006, the Boeing 777-200 was the world's longest-range commercial plane at the
time. It is a variant of Boeing's flagship 777 model.
Airlines like Air Canada, Emirates, and Qatar Airways continue to use the model. It has a
maximum capacity of 440 and typical seating between two classes (business and economy) of
317.

The plane has a length of 209 feet and one inch (63.7 meters), a height of 61 feet and one inch
(18.6 meters), and a wingspan of 212 feet and seven inches (64.8 meters)
The first 777-300ER, a variant of the 777, It has a maximum capacity of 550 passengers and
typical seating between two classes (business and economy) of 396.

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The plane has a length of 242 feet and four inches (73.9 meters), a height of 60 feet and eight
inches (18.5 meters), and a wingspan 21 feet and five inches (64.75 meters).
It has a maximum capacity of 605, and typical seating between three classes (first, business,
and economy) of 467. As of 2020, airlines like Air China, Korean Air, and Lufthansa continue
to operate the model.
The 747-400 was first introduced in 1989. The plane is now more commonly used to transport
cargo, but airlines like Asiana Airlines and Lufthansa continue to use the model for passenger
flights.
The plane measures 321 feet and 10 inches (70.66 meters) in length, 63 feet and six inches
(19.40 meters) in height, and has a wingspan of 211 feet and five inches (64.44 meters).
It has a maximum capacity of 660 and typical seating between three classes (first, business,
and economy) of 416. (mordorintelligence)

2.12. Competitive analysis

Boeing is the world's largest aerospace firm, selling, manufacturing, and designing its products
on a global scale. It is the leading US exporter and offers product and leasing support services.
Communication systems, advanced information, launch systems, defiance and electronic
systems, weapons, satellites, military aircraft, and commercial aircraft comprise its specialized
services and product range. The following are some of its key products:

Commercial planes include the 727, 757, 787, and 777, as well as the B&W Seaplane, DC-8,
DC-4, Douglas Amphibian, Model 40, and Supersonic Transport.

Defiance Products include the AJ Savage, the A-17/8A, the B-9 Bomber, the B-50, the CH-47
Chinook, the F-4 Phantom II, the F-15 Eagle, and the FJ Fury ,376 Satellite, 702 Satellite,
Apollo Lunar Spacecraft, International Space Station, Lunar Roving Eye, Surveyor Lunar
Spacecraft are among the space products.
Other Systems Included are the Personal Rapid Transit System and the Model 502 Gas Turbine
Engine. (mordorintelligence)

2.13. Market analysis in the Marketing strategy of Airbus

A few of the variables influencing the commercial aircraft market are changing lifestyles, rising
economic interactions between growing nations, government regulations, rising population
movements, cargo activity, political stability, and rising demand for air travel.

Based on (ADV) aircraft delivery value, China and India rank first and fourth among all
countries worldwide (airbus)

2.14. competitive advantage in the Marketing strategy of Airbus

Research and development (innovation): It has more than 3700 patents (statistics from 2015)
and invested 2702 million euros in 2015, a 1.3% increase over the previous year. It launched

P a g e 14 | 64
Biz labs in 2015 to hasten the conversion of ground -breaking concepts into corporate value
propositions.( mbaskool)
Strong product presence in the meta-market: The Airbus Group operates in the aerospace,
helicopter, and aircraft industries, which aids the company in exploiting technical
breakthroughs and incorporating them into linked industries. (mbaskool)

2.15. Brand equity in the strategy of Airbus –market share

Having 57% of the market share in the sector it serves and operates, the company has been able
to expand its reach and diversify its enterprises into similar fields including military helicopters
and aeronautics goods and services. (marketing91)

2.16. Airbus Porter Five Forces Analysis in commercial sector

Using a variety of internal and external elements, including competitors, customers, suppliers
(vendors and partners), financial strength, future scope, and alternative solutions, the Airbus
Five Forces study helps to assess the company's current position in the market. (mbaskool)
Let's begin the Porter Five Forces Analysis for the Airbus in commercial sector:

2.16.1. New Entrant Threat: (low)

In the Airbus Porter Five Forces Analysis, the threat of new competitors can be explained as
follows:
One of the top suppliers and builders of aeroplanes worldwide is Airbus. By focusing on the
entry barriers, it is possible to examine the threat posed by new entrants in the market. The
startup costs for a business in this sector are extremely high. As a result of economies of scale
working in their favour, incumbents are able to benefit from cost benefits. Furthermore, the
sector requires a lot of capital. For research and development, creating the aircraft, and
manufacturing them, Airbus needs significant capital. The market leaders continue to hold onto
market share by upholding their trusted brand reputation. For a new entrant, each of these
variables presents significant entry obstacles. Consequently, the danger of new competitors
is a weak force in the industry of manufacturing aircraft. (mbaskool)
2.16.2. Threat of Substitutes: (low)
The products offered by Airbus and other significant companies in the aerospace sector are
very distinctive.
To enhance their products, these businesses heavily invest in research and development.
For instance, Airbus spent more than $2 billion US dollars on R&D efforts in a single year.
Additionally, there are no alternatives to what the in commercial sectors has to offer. Any kind
of transportation, including cars, bicycles, trains, etc., can generally be used in place of an
aircraft, but their speed and level of service are incomparably worse. The fear of substitutes
is therefore a very weak factor for Airbus, it might be inferred. (mbaskool)
2.16.3. Bargaining Power of Customer (high)
Airbus's target market consists of very strong people. Customers include international defence
ministries and airline businesses. The target market is quite limited, and there are very few
P a g e 15 | 64
clients. The items are very expensive, highly specialised, and, to some extent, tailored to the
needs of the consumers. Each customer is valuable since they have spent millions of dollars on
the aeroplane. The businesses can't afford to lose their patrons. Additionally, each customer
makes a significant purchase.
Customers' negotiating power is a significant factor in the aerospace sector
2.16.4. Bargaining Power of Suppliers) low(
More than 10,000 suppliers from around the world provide raw materials to Airbus. There are
many suppliers, and they are dispersed geographically. Leading vendors include Liebherr,
Diehl, Safran, etc. To prevent a concentration of power, the corporation makes sure to bring on
extra suppliers. Each of these providers provides relatively small aeroplane units, hence there
is little differentiation between their offerings. At the level of Airbus, the product
differentiation is carried out. Apart from a few small contract termination costs, the
organisation also doesn't incur any switching costs.
Additionally, suppliers are unable to forward integrate or engage in direct competition because
of the capital-intensive nature of the aerospace sector. The suppliers' negotiating position is
poor.( mbaskool)
2.16.5. Competitive Rivalry: (low)
The commercial sectors has many participants. However, only a small number of the major
companies, such as Lockheed Martin, Raytheon, and Boeing, directly compete with Airbus.
The two leading companies in terms of global revenue are Airbus and Lockheed Martin, both
of which had a combined yearly revenue of more than $60 billion USD. The market is gradually
expanding. By 2030, it's estimated to be worth $500 billion. High exit barriers exist as a result
of the extensive capital requirements. Both asset sales and debt repayment come with costs.
Because customers typically buy an entire fleet of vehicles and the investments are substantial,
even for large customers, there is intense pricing competition. Because the market is expanding
slowly, the competitors would have to grow significantly in order to gain market share.(
mbaskool)

2.17. Test analysis

2.17.1. Test service
Airbus is Europe's market leader for environmental testing solutions. It is one of four European
test sites managed and approved for testing by the European Space Agency (ESA).
Airbus offers a comprehensive variety of testing services to leading enterprises all over the
world. Airbus teams manage one of the ESA-coordinated European Test facilities in Toulouse
and work through all aspects of a test campaign, from design and engineering through
execution and analytical services.
Airbus offers a wide range of services to its clients, including test facility engineering, test
administration services, quality test execution, and the construction of assembly, integration,
and testing (AIT) centers. (mbaskool)
2.17.2. Airbus testing portfolio
Airbus, as a major provider of environmental testing services, offers a wide range of
environmental testing facilities that can accommodate tiny equipment (less than 1 kg) to
massive system testing (10 tonnes). All testing facilities are conveniently located under one
P a g e 16 | 64
roof and are easily accessible. Mechanical Tests (vibration, acoustic, shock, and physical
property measurement), Thermal Tests (thermal vacuum, climatic, solar simulation, etc.),
EMC/RF Tests, Metrology and Contamination, and Test Engineering are all areas we handle
(specific set-up, facility modification, MGSE design, etc.)( mbaskool)
2.17.3. Test center and facility development
Airbus offers a wide variety of technical services to its customers, ranging from advising to
turn-key supply, for AIT center creation, test facility engineering and supply, test facility
renovation, and training. Airbus is involved in all aspects of the project, from the defining of
needs to design, supplier monitoring, on-site installation, training, and operational qualification
and assistance for the first test. Airbus has a unique global track record, thanks to the
construction of 23 AIT centers across the world.

2.17.4. Environment test

Airbus offers a wide variety of technical services to its customers, ranging from advising to
turn-key supply, for AIT center creation, test facility engineering and supply, test facility
renovation, and training. Airbus is involved in all aspects of the project, from the defining of
needs to design, supplier monitoring, on-site installation, training, and operational qualification
and assistance for the first test. Airbus has a unique global track record, thanks to the
construction of 23 AIT centers across the world.
2.17.5. Flight test benefit
Completely customizable solutions
Provides a wide variety of solutions and knowledge in the sector of test instrumentation
Ability to obtain a prototype in a short period of time
Take use of all instrumentation possibilities by utilizing cutting-edge technology.

2.18. Airbus PESTALE Analysis

2.18.1. Political factors
Political stability is important for an aerospace and military company. Political stability allows
for standardized legislation to control this industry. Because Airbus is a European corporation,
the recent political news between Europe and Britain has a negative impact on its operations.
Import and export duties will no longer be consistent. Both the UK and the EU will use distinct
currencies to conduct commerce. Global security threats are on the rise, and as a result,
governments throughout the world are striving to bolster their defences in order to prepare for
the worst. Even the United States has been buying defence hardware from other countries in
recent years.
The production facility can be relocated to a lower-cost location, but the political scenario
prevents the manufacturing unit from leaving the EU. Apart from the EU's stability and political
actions, it is also vital to observe the political moves and accords that will influence Airbus.
(Mbaskool)
2.18.2. Economic factors
The economic forces affecting defence and aerospace companies are considerably different
from those affecting other business sectors.

P a g e 17 | 64
The desire for air travel drives business here. Because disposable income is growing every
decade, flying is getting more affordable. However, in the event of an economic downturn, this
segment of the aircraft industry suffers greatly. Furthermore, currency fluctuations affect ticket
prices and consequently the total demand in this industry. Travel costs rise in tandem with
rising oil prices throughout the world.( mbaskool)
2.18.3. Social factors
People these days have a lot of discretionary income. They have completely different attitudes:
everyone wants to travel with Airbus and its rival since they are technologically the finest in
class. They experience a sense of pride when they fly by Airbus because it is a well-known
brand. It must research the demography of the nation in which it desires to operate. If the
majority of the population is unable to fly by Airbus due to the high cost of the ticket, such
routes should be discontinued for financial reasons. (mbaskool)

• CSR at Airbus
CSR is ingrained in Airbus's corporate concept. At Airbus, business procedures and processes
are built such that they do not become an impediment or burden to people's and the
environment's well-being. Simultaneously, these procedures and designs promote corporate
growth. At Airbus, the systematic design of operations helps management to guarantee that the
firm achieves sustainable commercial growth by lowering associated risk factors as well as via
community building aims and ambitions. Airbus focuses on three major aims to strengthen its
social effect and influence on the environment and on people's lives.

• Value at Airbus
Airbus uses the CSV technique to work on CSR. Because of the basic principles practised at
Airbus, this is made easy to adopt into business systems. They are as follows:
• 1.Everyone deserves to be respected.
• 2.Trust \integrity
• 3.Honesty \accountability
• CSR goal at Airbus
Increasing employment possibilities to improve community living standards Airbus
believes in working for and with the people. Airbus guarantees that as the company expands
across the world, it offers new job and life possibilities for millions of people. This is
accomplished through both direct employment and contracts, as well as inclusive business
possibilities.

• Improving the health and well-being of communities that work with Airbus. Airbus
collaborates with communities to help people become healthier and happier. Airbus
gives nutritional assistance and support to communities where it operates, as well as to
other populations living in low-income areas. Furthermore, Airbus manufactures and
sells health and hygiene products to improve the well-being of its clients as well as the
numerous communities with which it has partnered.

• lowering one's environmental impact

P a g e 18 | 64
Airbus tries to reduce its environmental footprint by adhering to carbon production and release
rules. Airbus also aims to create operational methods that prevent water and land pollution. All
Airbus products provide a disposal technique to decrease waste and promote recycling

2.18.4. Technological factors

Technology evolves, and so does the importance of enhanced technology in the aerospace
business. The importance of technology is so great that Airbus invests much in technological
research and development. The steel material utilised is constantly being researched. The
weight to mass contribution ratio should be reduced to improve aircraft efficiency. The world
is shifting toward renewable energy sources, and so technology that can use various types of
energy more efficiently is being implemented. The engine efficiency is constantly improving.
All efforts are directed on growing the business, and technology is crucial to giving Airbus a
competitive advantage. ((mbaskool)

2.18.5. Legal factors:

When Airbus utilizes someone else's technology, it must adhere to the copyright regulations
that have been established. Fright must comply with export and import regulations in each
operational zone. To prevent any form of consequence, each legislation must be rigorously
observed. There are rules that are agreed upon by all firms functioning in the aircraft sector,
such as 'anti-competitive legislation.' The substance that they may convey in their terror has
both internal and external affects. Internal, such as co-passengers' safety, and external, such as
government restrictions on the transfer of certain narcotics and other forbidden substances.
(mbaskool)
2.18.6. Environmental factors

Airbus is aiming for long-term sustainability. Replacing gasoline with something more
inventive and progressing toward renewable energy sources The whole aircraft sector
contributes to CO2 emissions.

Airbus has made adequate attempts to develop its technology in order to reduce emissions and
increase overall energy efficiency. Aerospace contributes to the industry's goal of improving
fuel economy by 1.5% every year from 2009 to 2020. The company as a whole has its own
sustainable aim in terms of the body components it utilises to build its aircrafts, as well as a
decrease in carbon emissions that contribute to global warming. (mbaskool)

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 2.19. BCG matrix in the Marketing strategy of airbus

The airbus:
deal with passenger airplanes, having a fleet ranging from 100 to 600 seats. It is ranked first in
the BCG matrix because it is the group's primary business, accounting for more than 70% of
total sales (45,854 million Euros out of 64450 Euros in 2015).

Airbus defiance and spacecraft

It is one of the top ten providers of defense and space planes globally, and the second largest
in the space industry, providing 20% of the group's total sales, and hence is highlighted in the
BCG matrix.
Airbus helicopters:
This business is a specialist area that provides a modern variety of helicopters for the civil and
military rotorcraft industries. (marketing91)

2.20. Financial Market Risks

2.20.1. Global Economic Conditions

The Company’s business, results of operations and financial condition are materially affected
by global economic conditions
Market disruptions and significant economic downturns may develop quickly due to, among
other things, crises affecting credit or liquidity markets, regional or global recessions, sharp
fluctuations in commodity prices (including oil), currency exchange rates or interest rates,
inflation or deflation, sovereign debt and bank debt rating downgrades, restructurings or
defaults, or adverse geopolitical events
Foreign Currency Exposure
Sales Financing Arrangements
Liquidity
Counterparty Credit
Pension Commitments

2.20.2.Business-Related Risks
COVID-19 Risks
Ukraine Crisis
Commercial Aircraft and Helicopter Market Factors
Commercial Aircraft and Helicopter Market Factors
physical Security, Terrorism, Pandemics and Other Catastrophic Events

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Technologically Advanced Products and Services

Legal Risks
Legal and Regulatory Proceedings
Anti-Corruption Laws and Regulations
Export Controls Laws and Regulations

Environment, Human Rights, Health & Safety Risks

Climate-Related Risks
Regulated Chemicals

3. Economic analysis:

3.1. GDP in France

2017-2018
France gdp for 2017 was $ $2,472,282B, a 1.1% increase from 2016 and France gdp for
2018 was $2,790.96B, a 12.9% increase from 2017 because of increase in consumer
spending, government spending and investment

2018-2019

• France gdp for 2018 was $2,790.96B, a 7.55% increase from 2017.
• France gdp for 2019 was $2,728.87B, a 2.22% decline from 2018. Because of decline of
consumer spending of 2019

2019-2020

• France gdp for 2019 was $2,728.87B, a 2.22% decline from 2018.
• France gdp for 2020 was $2,630.32B, a 3.61% decline from 2019. Because of happening
decline at consumer spending, net export and investment

2020-2021
• France gdp for 2020 was $2,630.32B, a 3.61% decline from 2019.
• France gdp for 2021 was $2,937.47B, a 11.68% increase from 2020. Because of happening
increase at consumer spending , government spending, net export and investment GRAPH
(macrotrends)

P a g e 21 | 64
 1. GDP
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2017 2018 2019 2020 2021 2022

GDP

(Figure 1 GDP)

3.2. GROWTH RATE FOR GDP

The living standards of the French have risen less rapidly than those of the Americans for nearly
a quarter of a century. This observation sums up a whole series of changes in the French
economy. Citizens are more focused on the persistently high unemployment and the emergence
of new inequalities. The recent track record of the French economy is of course influenced by
Europe’s mediocre economic performance and by macroeconomic policies, but can be traced
back to the fact that our productive model has not evolved sufficiently since the 1980s.
Likewise, the prospects that the gap in living standards with the Americans will widen over the
next quarter of a century are primarily due to the capacity of the US economy to innovate and
generate new activities
• From 2017 to 2018 increases by 12.8%
• From 2018 to 2019 decreases by 2.22%
• From 2019 to 2020 decreases by 3.61%
• From 2020 to 2021 increases by 11.68%( macrotrends)

2.Growth rate
20.00%

0.00%
2017 2018 Growth rate
2019 2020 2021 2022

(Figure 2 Growth rate )

3.3. Growth rate calculation and formula ( Year2 – Year1\ year1 )
2017-2018 ~ 2740.26– 2447.8\ 2447.8= 0.1194=11.94%
2018-2019 ~ 2698.9– 2740.26\ 2740.26= -0.015 = -1.5%

P a g e 22 | 64
Exit of the United Kingdom from the European Union
2019-2020 ~ 2617.75– 2698.9\ 2698.9 = -0.030 = -3.0%
Because of corona
2020-2021 ~ 2903.45– 2617.75\ 2617.75 = 0.109 = 10.9%
(macrotrends)

3.Growth rate
20.00%

15.00%

10.00%

5.00%

0.00%
2017 2018 2019 2020 2021 2022
-5.00%

growth rate

(Figure 3 Growth rate )

3.4. Real GDP FORMULA ~ Nominal \ (1+inflation rate )

Because GDP is one of the most important metrics for evaluating the economic activity,
stability, and growth of goods and services in an economy, it is usually reviewed from two
angles: nominal and real. Nominal GDP is a macroeconomic assessment of the value of
goods and services using current prices in its measure; it's also referred to as the current
dollar GDP.
Real GDP takes into consideration adjustments for changes in inflation. This means that if
inflation is positive, real GDP will be lower than nominal, and vice versa. Without a real
GDP adjustment, positive inflation greatly inflates GDP in nominal terms
(2017) = 2447.8 (2018) = 2740.26
(2018) = 2740.26 (2019) = 2698.9
(2019) = 2698.9 (2020) = 2617.75
(2020) = 2617.75 (2021) = 2903.45

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 4. Real GDP
4000
3000
2000
1000
0
2017 2018 2019 2020 2021 2022

Real GDP

• (Figure 4 real GDP )

3.1. Industry, Value Added (% Of GDP)

industry (including construction), value added (% of GDP) in France was reported at 16.66 %
in 2021, according to the World Bank collection of development indicators,

YEAR PERCENTAGE

2017 17.2

2018 17.2

2019 17.4

2020 16.5

TABLE 1 INDUSTRY GDP

5. industry GDP
17.6
17.4
17.2
17
16.8
16.6
16.4
16.2
16
2017 2018 2019 2020 2021 2022

GDP

Figure 5 Industry GDP

P a g e 24 | 64
3.6. AIRBUS AND FRANCE’S GDP

we estimate Airbus supported a 9.3 billion euro contribution to France GDP in 2019, with a
gross value added multiplier estimated to be 4.8 This means for every 1euro in gross value
added generated by the company itself, it supported a further 3.80 euro around the rest of the
France economy through its expenditure. Owing to the extensive and sizeable nature of Airbus’
France supply chain, the indirect channel accounted for nearly half (47%) of this contribution
To put these numbers into context, Airbus’ total contribution to GDP was similar in size to that
produced by the city . In 2020, Airbus’ gross value added contribution to France GDP was 5.6
billion euro. This total was affected by both the fall in profitability impacting Airbus’ direct
gross value added contribution, and the impact of reduced procurement spending on the indirect
and induced channels. Airbus supported 128,300 jobs across the France in 2019, The company
itself employed nearly 13,000 people across the France (10% of the total). Mirroring the case
with its contribution to GDP, Airbus supported the greatest number of people through its
procurement: an estimated 73,800 jobs with France suppliers, or 58% of the total . Finally,
Airbus and its suppliers’ wage payments supported 41,800 France jobs (33% the total). We
estimate Airbus’ activities sustained 86,400 jobs across the country in 2020. Its direct
employment in the France decreased slightly to above 12,000, with the majority of the decline
being in jobs supported along its France supply chain, owing to its reduced procurement of
France goods and services. This impact spreads into its induced employment impact also, as
reduced activity in the supply chain impacts how much those employed by Airbus’ suppliers
spend in the consumer economy The activity and employment supported by Airbus generated
significant tax revenues for the France Exchequer. We estimate Airbus’ operations raised more
than 2.0 billion euro in tax revenues in 2019, with the majority raised along its France supply
chain and by the wage induced spending it sustains. To place this number in context, this means
1euro in every 310 euro collected in 2019 can be attributed to Airbus’ activity.19 Put another
way, this total could be used to fund 42% of the Government’s Levelling Up Fund, or the
Catch-up education programmed twiceover.20 In 2020, we estimate Airbus supported more
than 1.4 billion euro in total tax payments, meaning 1euro in every 400 euro collected in 2020
can again be attributed to Airbus’ activity.

3.7.GDP per capita

• France gdp per capita for 2018 was $41,593, a 7.25% increase from 2017.
• France gdp per capita for 2017 was $40,134, a 4.7% increase from 2016.
• France gdp per capita for 2020 was $39,037, a 3.8% decline from 2019.
• France gdp per capita for 2019 was $40,579, a 2.44% decline from 2018.
• France gdp per capita for 2021 was $43,519, a 11.48% increase from 2020.

6.GDP per capita

20.00%

15.00%

10.00%

5.00%

0.00%
2017 2018 2019 2020 2021 2022
GDP per capita

(Macrotrend) (Figure 6GDP per capital)

P a g e 25 | 64
 3.8.INFLATION
• France inflation rate for 2018 was 1.85%, a 0.82% increase from 2017
• France inflation rate for 2019 was 1.11%, a 0.74% decline from 2018
• France inflation rate for 2020 was 0.48%, a 0.63% decline from 2019.
• France inflation rate for 2021 was 1.64%, a 1.17% increase from 2020
(Macrotrends)

7. INFLATION
8.00%

6.00%

4.00%

2.00%

0.00%
2017 2018 2019 2020 2021 2022
INFLATION

• (Figure 7 inflation )

The inflation rate of a particular country affects the change in the exchange rates of this country
against the currencies of other countries. When inflation rates increase and the value of the
currency of this country decreases, purchases of the products of this country increase, and on
the contrary, when inflation rates decrease and the currency value of this country decreases,
purchases of the products of this country decrease.
In the case of the extent to which Airbus was affected by the inflation rates in France over the
past four years, it is negligible because the change in inflation rates is very small.
This is one of the main reasons that any company is looking for in order to choose the country
to do its business in, which is to be relatively stable in inflation rates.

3.9. Unemployment
The unemployment rate in France ticked down to 7.3 percent in the third quarter of 2022 as
widely expected, from 7.4 percent in the previous period, as the number of unemployed
people dropped by 17,000 to 2.3 million. The jobless rate for people aged 15-24 rose 0.3
points to 18.3 percent, but remained 3.3 points below its pre-crisis level. Meanwhile, the
unemployment rate was virtually stable for those aged 25 to 49 (-0.1 points) at 6.5%, and for
those aged 50 or more, at 5.1percent. The employment rate went up 0.3 points to an all-time
high of 68.3 percent, while the activity rate rose by 0.2 points to a record 73.7 percent

P a g e 26 | 64
 Unemployment 9.41 9.02%, 8.41%, 8.01%, 8.06%,

France France France

France unemployment unemployment unemployment
unemployment rate for 2019 rate for 2020 rate for 2021
rate for 2018 was 8.41%, was 8.01%, was 8.06%,
was 9.02%, a 0.61% a 0.4% a 0.05%
a 0.39% decline from decline from increase from
decline from 2018. 2019. 2020.
2017.

(Table 2 unemployment)

8. Unemployment

10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2017 2018 2019 2020 2021 2022

Unemployment

(Figure 8 unemployment) (macrotrends)

Airbus and unemployment in France

the European Commission has proposed that 297 dismissed Airbus workers in France, who
lost their jobs due to the pandemic, will be supported with €3.7 million from the European
Globalizations Adjustment Fund for Displaced Workers (EGF). The funding will help them
find new jobs through advice on how to start their own business and start-up grants. we will
empower 297 people in the aeronautic sector in France who lost their jobs due to the COVID-
19 pandemic to relaunch their careers with targeted advice on business creation and grants to
help them set-up their own company.”
The COVID-19 pandemic and related travel restrictions hit the aeronautic sector hard and the
related economic crisis reduced the purchasing power of many air transport customers. Plans
to buy new aircraft were put on hold or cancelled, and many aircraft were retired prematurely
as part of airlines' restructuring plans.
In France, despite the wide use of short-time work schemes, Airbus had to implement a
restructuring plan and many workers lost their jobs. Thanks to the EGF, 297 former Airbus
workers will receive targeted active labor market support to help them start their own business
and return to work.

P a g e 27 | 64
 3.11.Tax Rate
YEAR 2017 2018 2019 2020 2021

tax rate 5.043 4.570 4.949 5.106 26.5

(Table 3 tax rate)

9.tax rate

30
20
10
0
2017 2018 2019 2020 2021 2022

tax rate

(Figure 9 tax rate )

3.12. Airbus Group Income Taxes
Airbus Group annual/quarterly income taxes history and growth rate from 2012 to 2022.
Income taxes can be defined as the total amount of income tax expense for the given period.

• Airbus Group income taxes for the quarter ending September 30, 2022 were $-
0.075B, a 134.54% decline year-over-year.
• Airbus Group income taxes for the twelve months ending September 30, 2022
were $1.044B, a 3.35% decline year-over-year.

• Airbus Group annual income taxes for 2021 were $1.009B, a 2165.28%
increase from 2020
• Airbus Group annual income taxes for 2020 were $0.045B, a 98.34% decline from
2019.Airbus Group annual income taxes for 2019 were $2.676B, a 77.83%
increase from 2018.

10. airbus tax rate

3.000
2.500
2.000
1.500
1.000
0.500
0.000
2017 2018 2019 2020 2021 2022
Taxes

(Figure 10 airbus tax rate) (macrotrends)

P a g e 28 | 64
4. Interest rate

The France Long Term Interest Rate is the yield received for investing in a French
government issued bond with a maturity at or close to 10 years. The rate is compiled
by the ECB to provide a comparable long term rate for every European country. The
yield of long term bonds are closely watched by central banks as lowering yields can
signal a lack of confidence in the economy.
France Long Term Interest Rate is at 2.62%, compared to 2.58% last month and 0.05%
last year. This is higher than the long term average of 2.52%.

YEAR 2017 2018 2019 2020 2021

Interest rate 0.67 0.64 0.58 0.46 0.41

(Table 4 interest rate)

(macrotrends)

11. Interest rate

0
2017 2018 2019 2020 2021 2022

Interest rate

• (Figure 11 interest rate )

4.12. EXCHANGE RATE

YEAR 2017 2018 2019 2020 2021 2022

Exchange 1.1304 1.1811 1.1199 1.142 1.183 1.192
rate

(Table 5 EXCHANGE RATE)

(tradingeconomics)
4.13. Economic activity and the labour market
Relative changes in export and import prices arising from a change in the exchange rate
mainly influence demand for tradable goods and services. But exchange rate
movements also have implications for the demand for non-tradable goods and services.
In the case of depreciation, the resulting increase in export volumes and decrease in
import volumes will increase national income in France. This, in turn, will increase
demand for non-tradable goods and services produced in France. In order to meet the

P a g e 29 | 64
 increased demand for their products, France firms will have to hire more workers,
which will increase employment and lower the unemployment rate in France.

direct effect
The direct effect of an exchange rate movement is to change the prices of goods and
services produced in france relative to the prices of goods and services produced
overseas. When the Euro depreciates, or loses value, less foreign currency is required
to purchase a given amount of euros. This makes france produced goods and services
cheaper than before when compared with goods and services produced overseas.

Indirect Effects
The indirect effects of exchange rate movements arise because changes in the relative
prices of france and overseas goods and services affect economic activity and inflation
in france . To highlight this, we use the example of a depreciation of the euro. (An
appreciation of theeuro has the opposite effect on economic activity and inflation.)

12. Exchange rate

1.2

1.15

1.1

1.05
2017 2018 2019 2020 2021 2022

Exchange rate

• (Figure 12 EXCHANGE RATE)

(Exchangerates)

13.15.. Exchange Rate with the famous currencies

YEAR YEN YUAN Dollar Pound Sterling
2017 132.39 7.81 1.17 1.14
2018 128.79 7.89 1.14 1.12
2019 120.34 7.76 1.11 1.16
2020 123.61 7.82 1.18 1.11
2021 128.241 7.21 1.13 1.17

(Table 6 Exchange Rate with the famous currencies)

(exchangerates)

P a g e 30 | 64
 • The exchange rate history of the euro against the Japanese yen suggests that by 2022
one euro could buy as many yens as in early 2014. Since the introduction in 1999,
the exchange rate against the Japanese currency fluctuated: before the financial
crisis in 2008, one euro could buy almost 170 yens. In the summer of 2012, this had
decreased to less than 100 yens. The exchange rate witnessed a steady growth
amidst the coronavirus pandemic 2020, however. By December 12, 2022, the rate
of a Japanese yen was 144.49 per euro.

• The euro to Chinese yuan exchange rate history reveals a decline since 2020,
although figures recovered somewhat in 2022. By late 2022, the currency exchange
seemed to have stabilized somewhat: One euro could buy nearly 7.34 yuan on
December 12, 2022. This is less than before the financial crisis in 2008, when this
rate was briefly over 11 yuan. At its lowest point - in early 2015 - the exchange rate
dropped well below seven yuan

• Between 2001 and 2008, the average annual exchange rate of the euro to the U.S.
dollar noted a steep increase. In 2008, the euro to U.S. dollar annual average
exchange rate was equal to 1.47, which meant that one euro could buy 1.47 U.S.
dollars. By 2019, this value had decreased overall, to a value of 1.12 which meant
that one euro could buy 1.12 U.S. dollars

• The average exchange rate of the euro to the pound nearly reached 0.9 GBP over
the course of 2022, a figure lower than in previous years. This according to a
comparison between average monthly and daily exchange rates. Figures changed
especially in the second half of 2022, after the British government first announced
its inflation plans. By December 12, 2022, however, one euro was valued at 0.86
British pounds. By 2016, this value had decreased to a value of 0.82, which again
meant that one euro could buy 0.88 British pounds. The Brexit referendum is the
likely reason for the noted increase in value of euro to British pound sterling from
2017 onwards.

4.14. Credit Ratings for airbus

To assist debt and fixed income investors to better evaluate the risk of any given investment,
the capital market uses the publicly available independent assessments of rating agencies.
Through regular discussions with the senior management of companies, rating agencies gain
an insight into the strategy and planning of the companies that they rate. Using this information
as a base, supplemented by quantitative analysis, rating agencies evaluate the creditworthiness
of the issuer companies through a system of rating classifications. Companies which want to
raise money in the capital markets in the form of bonds, commercial paper and other debt
instruments normally need a minimum of one or, better, two ratings.
The leading international rating agencies are Standard & Poor's, Moody's Investors Service and
Fitch Ratings.
The higher the rating classification is, the smaller is the potential risk that a company cannot
meet its debt obligations (interest and principal). The debt investors charge a higher rate of
interest for financing a higher risk investment. Thus a company with a strong rating can raise
P a g e 31 | 64
 capital more advantageously than a company which has a less favourable rating. Additionally,
the outlook given by a rating agency provides a supplementary reference point for the investor
in assessing the probable development of the rating. (theglobaleconomy)

4.15. Credit Ratings

Rating Agency Short Term Long Term Outlook Last Update
Standard & Poor's A-1 A Stable 03 August 2022
Moody's P-1 A2 Stable 04 October 2022
Fitch Ratings (unsolicited) F1 BBB+ Stable 28 Sep
(Table 7 Credit Ratings)
(Theglobaleconomy)
4.16. Credit ratings for France

Standard & Poor's credit rating for France stands at AA with negative outlook. Moody's credit
rating for France was last set at Aa2 with stable outlook. Fitch's credit rating for France was
last reported at AA with negative outlook. DBRS's credit rating for France is AA (high) with
stable outlook. In general, a credit rating is used by sovereign wealth funds, pension funds and
other investors to gauge the credit worthiness of France thus having a big impact on the
country's borrowing costs. This page includes the government debt credit rating for France as
reported by major credit rating agencies.( theglobaleconomy)

Agency Rating Outlook Date

S&P AA negative Dec 02 2022

DBRS AA (high) stable Oct 16 2020

Fitch AA negative May 15 2020

DBRS AAA negative Apr 17 2020

Moody's Aa2 stable Feb 21 2020

Moody's Aa2 positive May 04 2018

(Table 8 Credit ratings for France)

(theglobaleconomy)

P a g e 32 | 64
 4.17. Foreign Direct Investment in France
The country is ranked 32nd out of 190 countries in the Doing Business 2020 report published
by the World Bank (latest report). The country's assets are its position as the third European
power, its highly qualified workforce, its vast industrial base, its agricultural resources, its
world cultural reputation and its geographic location in the center of Europe.

• France foreign direct investment for 2021 was 22.8 B a 71.4% increase from 2020.
• France foreign direct investment for 2020 was $13.24B, a 76.96% decline from 2019.
• France foreign direct investment for 2019 was $57.48B, a 25.82% decline from 2018.
• France foreign direct investment for 2018 was $77.49B, a 116.05% increase from
2017.
• France foreign direct investment for 2017 was $35.87B, a 9.34% increase from 2016.
(Macrotrands)
4.18. What to consider if you invest in France (Strong Points -
Weak Points -Government Measures to Motivate or
Restrict FDI)
4.18.1. Strong Points
• France is one of the top ten world economic powers and has many assets to attract
foreign investors:
• A strategic geographical location in the centre of Western Europe
• A developed tertiary fabric (including tourism), a vast industrial base and strong
agricultural production capacity
• Leading infrastructure and quality public services
• A skilled and productive workforce (2nd European country in terms of hourly
productivity) and a dynamic demographics
• An investment-friendly business environment and a relatively stable and transparent
legal framework
• A diversified economy that is full of a wide range of players ranging from large
multinationals to high-tech start-ups (French tech).

4.18.2. Weak Points

The main obstacles to attracting FDI in the French economy are:
• One of the highest corporate tax rates in the world
• High cost of labor
• Heaviness of the tax and work regimes
• High unemployment rate (7.9% in 2021, INSEE) which particularly affects young
people and older workers
• Growing inequalities
• High public spending fueling already significant public debt (112.3% of GDP in 2021,
IMF)
• A low level of SMEs operating for export or investing in innovation.

4.19. Government Measures to Motivate or Restrict FDI

Many reforms have emerged in recent years with the aim of revitalizing the national economy
and attracting foreign investors. Here are the main ones:

P a g e 33 | 64
 • The number of administrative formalities for the establishment of foreign companies
has been reduced.
• The establishment of a tax credit program of 20 billion EUR (competitiveness tax
credit), the abolition of the solidarity tax and the creation of the research tax cred it
and incentives for young innovative companies.
• The reform of the labour legislation reinforcing vocational training and adding more
flexibility to the labour market.
• The reduction of the corporate income tax rate from 33% to 25% by 2022.
• Competitive taxation of research and temporary exemption arrangements for
innovative start-ups and new businesses.
• Foreign companies have access to the same subsidies as French companies (support
for productive investment, R&D, vocational training, job creation, etc.).

(santandertrade)

4.20. FDI in airbus

Years Amount Companies

2021 $ 3B from Bank of America Merill Lynch/

Citigroup/GoldmanSachs
2020 €1.25 B BNP Paribas / CA-CIB / HSBC / JP Morgan / Société
Générale
2017 $ 750 m JPMorgan, Citigroup/ GoldmanSachs /Morgan Stanley

(Table 9 FDI in airbus)

(macrotrends)

5. Financial analysis
4.1. The average number of shares in airbus company

YEAR AVERAGE
2008 12.77
2009 12.4275
2010 16.81
2011 22.2
2012 28.2
2013 33.4
2014 48.025
2015 58.532
2016 56.69
2017 56.69
2018 99.05
2019 123.065
2020 68.6775
2021 119.03
2022 100.68
(TABLE 10 average number of P a g e 34 | 64
shares in airbus)
 13. stock
140

120

100

80

60

40

20

0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

stock

(Figure 13 stock)
4.1.Gasoline price in the last 15 years and impact that in airbus
Gasoline price in the last 15 years and its impact on Airbus can be analyzed from different
perspectives. One possible way to look at it is to compare the gasoline price with jet fuel
price, which is a major cost component for airlines and affects their demand for new aircraft.
and the average annual jet fuel price in the world for the last 15 years were:
Year Gasoline Price Jet Fuel Price
2007 2.80 838
2008 3.27 1,214
2009 2.35 624
2010 2.79 844
2011 3.53 1,177
2012 3.63 1,232
2013 3.51 1,193
2014 3.36 1,032
2015 2.43 610
2016 2.14 462
2017 2.42 578
2018 2.73 789
2019 2.60 736
2020 2.17 414
2021 3.06 750

(Figure 14 Gasoline Price)

P a g e 35 | 64
 14.Gasoline Price
4
3.5
3
2.5
2
1.5
1
0.5
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Gasoline Price

(Figure 14 Gasoline Price)

As you can see, the gasoline price and the jet fuel price have a similar trend over the years,
reflecting the influence of crude oil price and other factors on both products. However, the jet
fuel price is usually higher than the gasoline price, due to higher taxes, transportation costs,
and refining margins
4.1.the demand and supply of airbus products the last 15 years
According to the data, Airbus had the following orders and deliveries for its commercial aircraft
from 2007 to 2021.
Year Orders Deliveries
2007 1341 453
2008 777 483
2009 271 498
2010 574 510
2011 1419 534
2012 833 588
2013 1614 626
2014 1456 629
2015 1080 635
2016 731 688
2017 1109 718
2018 747 800
2019 1131 863
2020 383 566
2021 1078 661
(TABLE 12 orders)

P a g e 36 | 64
 15.Orders &Deliveries
1800
1600
1400
1200
1000
800
600
400
200
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Orders Deliveries

(Figure 15Orders &Deliveries)

4.1.Airbus in financial markets

Airbus is a trans-European aerospace manufacturer and holds a strong market position in
manufacturing aircraft for worldwide usage. Earnings before interest and taxes (EBIT) of
Airbus increased continuously, reaching almost six billion euros in 2019. However, in 2020,
due to the COVID-19 pandemic, Airbus' EBIT dropped to only 618 million euros. From 2010
to 2019, the expenditure of Airbus Group on research and development (R&D) increased
gradually, reaching over 3.3 billion euros in the fiscal year 2019. As a result of high and
increasing R&D expenditure, Airbus constantly expanded its patent pool to bring new
innovations and sustain its market position in the aerospace industry. For instance, Airbus held
the greatest number of patent applications at the European Patent Office in 2018 in the field of
transport engines, pumps and turbines, with 253 patent applications.

(Figure 16 Airbus in financial markets)

P a g e 37 | 64
 4.5. from 2012 to 2022. Revenue can be defined as the amount of money a company receives
from its customers in exchange for the sales of goods or services. Revenue is the top line item
on an income statement from which all costs and expenses are subtracted to arrive at net
income.

17.net income
6000

4000

2000

0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
-2000

net income

(Figure 17 net income)

4.2.Costs and salaries

(TABLE 13 Costs and salaries)

P a g e 38 | 64
 4.1.How Much Do Airbus Aircraft Cost?
Actual aircraft sale prices are a well-guarded subject, with neither airlines nor manufacturers
disclosing the true value of an order. One thing is certain: hardly anyone actually pays the list
price from the catalog. However, since the list price is what is publicly available, let's take a
look at the official cost of Airbus aircraft.
First, a note on list prices
When it comes to how much aircraft cost to buy, it is important to differentiate between the
list price and the price that airlines will actually end up paying. This largely depends on
negotiations and the size of the order, with more units bringing down costs. Industry sources
say that a general rule of thumb is to take the list price and divide it by two, and you would be
somewhere closer to the actual number.
Narrowbodies
A220
The much lauded and up-and-coming Airbus A220 comes in two variants. With a 2-3
economy configuration, the narrow narrowbody has a list price of $81 million for the smaller
A220-100 version. The larger and more popular variant, the A220-300, is listed for $91.5
million.
Of course, carriers like Delta Air Lines are not going to pay full price when putting in an
order for 95 of the type. Nor will airBaltic, now an all-Airbus A220 carrier launching its own
maintenance training division.
A318
The smallest and rarest of the Airbus A320 family, the A318, is also the cheapest of Airbus'
offerings. The plane, known as the Baby Bus, comes in at $77.5 million at list price.
It has not exactly been a bestseller for Airbus, with only 81 orders since the start of
production in 2001. While Frontier Airlines was the launch customer, the only carrier with a
substantial order was Air France, which still operates 18 of the type. However, these are
meant to be replaced by A220s.
A319
The A319, which took its first flight in 1995, has sold 1,486 copies. The current engine option
(A319-100) type goes for $92.3 million at list price. However, the new engine option, the
A319neo, which thus far has orders for 84 jets, goes for $101.5 million. Not surprising,
seeing as the engine is the most expensive part of an airliner.
American Airlines is the type's largest operator, with 133 in its fleet. However, most of these
came from the merger with US Airways at the end of 2013, so it is difficult to determine their
market value.
A320 and A321
American Airlines is not only the carrier with the most A319s but also the largest A320
family operator in total. It has no less than 424 of both the CEO and neo variations in its fleet.

P a g e 39 | 64
The A320ceo costs a neat $101 million at list price, while the A320neo goes for $110.6
million. The A321, on the other hand, costs $118.3 million and $129.5 million, respectively.
However, it is unlikely that IndiGo paid anywhere near such sums when making its record-
breaking order for 300 A320 family aircraft in October 2019. Over the last decade, the Indian
low-cost carrier has ordered over 700 of the new versions and even managed to keep taking
deliveries at a normal pace throughout 2020.
A320 and A321
American Airlines is not only the carrier with the most A319s but also the largest A320
family operator in total. It has no less than 424 of both the ceo and neo variations in its fleet.
The A320ceo costs a neat $101 million at list price, while the A320neo goes for $110.6
million. The A321, on the other hand, costs $118.3 million and $129.5 million, respectively.
However, it is unlikely that IndiGo paid anywhere near such sums when making its record-
breaking order for 300 A320 family aircraft in October 2019. Over the last decade, the Indian
low-cost carrier has ordered over 700 of the new versions and even managed to keep taking
deliveries at a normal pace throughout 2020
A350
Airbus' flagship widebody, the A350-900, costs $317.4 million according to the list price. Its
sibling, the A350-1000, sells for $366.5 million. The A350 has proven popular with airlines
and has 930 orders to date. Qatar Airways has 50 of the type in its fleet - with orders for
another 28 of the A350-1000.
A380
Finally, the turn has come to the superjumbo of the skies: the Airbus A380. Whether or not it
was before its time, or airlines were just not using it properly, the project never became the
commercial success Airbus was hoping for. The last A380 was delivered to Emirates last year,
but the type has been resurgent in 2022 and shows no signs of retiring completely soon.
While the behemoth plane was still for sale, it was listed for a massive $445.6 million. Once
again, this number should be taken with a pinch of sale, with Emirates likely seeing a nice
discount on its 123 deliveries.

4.2.Airbus Salaries
How much do people at Airbus get paid? See the latest salaries by department and job title.
The average estimated annual salary, including base and bonus, at Airbus is $129,339, or $62
per hour, while the estimated median salary is $129,081, or $62 per hour.
At Airbus, the highest paid job is a Director of Sales at $230,358 annually and the lowest is a
CS Rep at $44,939 annually. Average Airbus salaries by department include: Marketing at
$108,866, Business Development at $158,767, Finance at $89,045, and Legal at $155,342.
Half of Airbus salaries are above $129,081.

Salaries contributed from Airbus employees include job titles like Director of HR and IT
Manager. Comparably data has a total of 0 salary records from Airbus employees
P a g e 40 | 64
(Figure 18 salary average)

4.9. Weakness points and solutions

9.1. Weaknesses of Airbus
• High Manufacturing Costs – When compared to BOEING, AIRBUS has higher
production costs. For example, AIRBUS’ A 380 was delayed for nearly a year, increasing
total production costs and lowering the AIRBUS group’s share price by 26%.
• Problems with vital services – Several of the company’s key programmes have had
issues. Its vA350s have a lot of issues. The delays are caused by cabin objects and a variety
of other factors. Only 8 A320 Neos have been delivered by July 2016, compared to a
projected 30+. One of its Super Puma helicopters crashed, causing problems in the
company’s helicopter segment.
• A380’s popularity is waning – When Airbus first introduced the A380, it expected the
superjumbo jet to be a smash hit. It also had some short-term success, but it was not as
successful as Airbus had hoped in the long run. Several airlines have cancelled their A380
orders. The number of A 380s produced every month is likely to be decreased to one.

4.10.Delays in delivery
Delays in delivery have been an issue for Airbus over past years, especially in the A380
aircraft. Because of this, Airbus has accumulated backlogs which could affect top line growth
if
the delays continue to persist. According to the Business Source Alumni Edition Database, In
2009 delays in delivery of the A380 aircraft caused a 26% drop in the share of Airbus Group.
As
a consequence, the chief executive officer and multiple managers left the company (Marketline,
2015). Following this, the company experienced cancelled orders on freighters from FedEx
and

P a g e 41 | 64
UPS as Airbus focused on the A380 aircraft (Marketline, 2015).
According to his article “Airbus Beats Forecasts, Warns of Slowdown in Orders,”
Driskill states that Airbus exceeded its delivery expectations in 2016 with its highest ever at
8%
(Driskill, 2017). Driskill also adds that the company experienced difficulties in the supply chain
and in the cabin for the A350 aircraft. At the end of 2016 the overall backlog for Airbus was
6,874. This could pose problems for making the deliveries of the A350 aircraft for the years
ahead as the company is looking at the A350 aircraft to generate a large portion of future sales
. Therefore, if Airbus runs into future delivery issues with the A350 aircraft then
the company’s top line growth could diminish.

4.11.. More details about Delays in delivery

Delays in delivery of Airbus in the last five years have been reported by various source Some
of the examples of the delays are:
• In 2017, Airbus delivered 181 fewer aircraft than planned due to engine issues with
Pratt & Whitney and CFM International.
• In 2018, Airbus delivered 800 aircraft, 20 fewer than its target, again due to engine
delays and industrial problems.
• In 2019, Airbus delivered a record 863 aircraft, but still missed its revised target of
880-890 aircraft, partly because of trade tensions between the US and China.
• In 2020, Airbus delivered 566 aircraft, down by a third from 2019, due to the COVID-
19 pandemic and its impact on air travel and demand for new planes.
• In 2021, Airbus delivered 611 aircraft, up by 8% from 2020, but still below its pre-
pandemic levels. It also faced supply chain and labour problems, as well as maintenance and
repair bottlenecks for existing aircraft.
The average delays in delivery of Airbus in the last five years can be estimated from its
orders and deliveries data1. According to the data, Airbus had the following orders and
deliveries for its commercial aircraft from 2017 to 2021:
Year Orders Deliveries Difference
2017 1109 718 391
2018 747 800 53
2019 1131 863 268
2020 383 566 183
2021 1078 661 417
(TABLE 14 delays in delivery )

The difference between orders and) deliveries indicates the backlog of aircraft that are not
delivered on time. A positive difference
) means that there are more orders than deliveries,
P a g e 42 | 64
while a negative difference means that there are more deliveries than orders. The average
difference for the last five years is 168, which means that on average, Airbus delivered 168
fewer aircraft than ordered per year. This can be used as a proxy for the average delays in
delivery of Airbus in the last five years. However, this does not account for the variations in
delivery time for different models and customers, or the impact of cancellations and
conversions.
4.11.2. Suggesting solution : While the blame for maintenance-related delays,
So they can make a periodical maintenance with better team and tools to at least reduce the
problem
as one anonymous executive even remarked that the aircraft makers are facing production
difficulties in terms of getting parts such as galleys and lavatories on time.
So, they can make sure that they can afford and have the parts that the order request
So maybe the customers can accept the delay but don’t cancel it
And make more specific and realistic schedule.

4.12.Operational defects and inefficiencies

Operational defects and inefficiencies that have occurred to aircraft could prove to be a
weakness for Airbus that could damage its brand image. These past defects could instill a lack
of
confidence in the consumer for the safety of the airline. According to the Business Source
Alumni Edition Database, some of these defects in past years occurred because of engine
failures
in the A380 aircraft . For one instance in 2010, an A380 aircraft being
operated by Qantas suffered an engine failure after takeoff in Singapore and had to turn around
and make an emergency landing back in Singapore . Also, in 2009, the airliner
Emirates warned Airbus of the various problems it witnessed with the A380 aircraft with a
written report of listed complaints; these included engine defects, missing cabin fittings, and
burnt electric cables .
For any commercial airline, operational inefficiencies can weaken its position in the
market as consumers purchasing the aircraft will become skeptical of the safety level of the
aircraft. In addition to this, these defects will make passengers hesitant to purchase tickets
associated with flying that particular aircraft.
4.12.1. Suggesting solution: The Group applies new technologies to improve the efficiency
of existing products, reducing their environmental impact. It is applying incremental
innovation, for example, to develop the neo (new engine option) ranges of Airbus aircraft.
P a g e 43 | 64
 Looking further to the future, game-changing technologies are being researched to drive the
next generation of ‘cleantech’ and sustainable mobility
4.13.High production costs
High production costs can create a weakness for Airbus as it competes with its rival
Boeing and the emergence of new markets for future market share. In the past, Airbus has
endured high production costs for its aircraft from financial problems evolving from the
previously discussed delays in delivery and defect issues. When thinking logically, delays in
delivery are triggered from delays in production. According to the Business Source Alumni
Edition Database, delays in production are caused by challenging interiors and union and
government objections to streamlining.
Henceforth, as more delays in delivery and production accumulate, the costs that the
company endures to manufacture the aircraft increases. High production costs could also lead
to the company’s inability to generate large sums of money for its most expensive aircraft.
Presently, the company is looking to make the A350 the future provider of sales. With
expected delivery and production delays expected to come for the new aircraft
Year Production Cost (€ billion)
2021 42.8
2020 41.9
2019 54.4
2018 47.6
2017 43.1
(TABLE 15 Production Cost)

)
)
19.Production Cost (€ billion)
60
50
40
30
20
10
0
2017 2018 2019 2020 2021

Producti on Cost (€ billion)

(Figure 19 Production Cost)

4.14.Crisis affected airbus.

. 2008-2009 Global Financial Crisis

P a g e 44 | 64
A decrease of 42 percent in sales due to the recession, which led to a decrease in the sale of
24 aircraft to 18, which led to a decrease in the price of my shares, Airbus
in 2009 crashing two plans
June 2009, inconsistent airspeed indications led to the pilots inadvertently stalling the Airbus
A330 serving the flight, failing to recover from it and eventually crashing into the Atlantic
Ocean, killing all 228 passengers and crew on board. that affects negative in air bus company
and decrease the price of shares.
In 2012 &2011, activity in the Eurozone shrank; the French economy was at a standstill
In 2012, global activity slowed after the sovereign debt crisis spread to Europe and a
slowdown occurred in the emerging economies. Faced with a rise in inflation, the authorities
in the emerging countries tightened up their monetary and fiscal policies in 2011, leading to a
significant slowdown in activity in these economies in 2012. From mid-2011 onwards, the
European economies suffered from tougher credit conditions, resulting in financial tensions
in several countries and intensified fiscal consolidation measures. Activity in the Eurozone
contracted in 2012, making a strong contribution to the slowdown in the world economy via
trade channels. Conversely, the fiscal stimulus implemented by Japan to accelerate
reconstruction in areas destroyed by the earthquake made a rebound in activity possible. In
the United States, despite the fall in public expenditure, growth stayed at around 2%,
sustained by a very active monetary policy. In this global context, French GDP remained
stable, after increasing by 2.0% in 2011 and 1.7% in 2010. The internal growth drivers had
stalled, especially household consumption, which was declining because of the drop in
purchasing power (-0.9%) caused by the weak momentum of earned income and the
introduction of various fiscal consolidation measures. Investment too was in decline. Activity
was sustained by exports (+2.4%), but was affected by a clear destocking trend. Confronted
with this gloomy outlook, the unemployment rate rose again. The public deficit fell back to
4.8% of GDP, after 5.3% in 2011: the spontaneous widening of the public deficit caused by
the deterioration in the short-term outlook was more than offset by fiscal consolidation
measures with effect in 2012. The public-debt burden reached 90.2% of GDP.
2019 & 2020 Covid 19, layoffs and lack of revenue
its staff it may have to cut thousands of jobs, reported a consolidated first-quarter loss of
€481 million (US$521.9 million) compared to last year’s consolidated net income of €43
million in the same quarter a year ago and attributed the disappointing results to the global
shutdown of the commercial aviation industry due to the COVID-19 pandemic. The company
said consolidated revenues fell to €10.6 billion compared to €12.5 billion in the first quarter a
year ago,, “reflecting the difficult market environment impacting the commercial aircraft
business with 40 less deliveries than a year earlier, partly offset by a better mix and more
favorable foreign exchange environment” The consolidated loss per share was €0.61
compared to a 2019’s first-quarter earnings per share of €0.05.
2020
How did the company increase stock price after the corona pandemic in 2022 ?

P a g e 45 | 64
Now, in 2022, with Covid pretty much gone (so I hope), the travel industry bounced back
again, and the first airlines reported green numbers during the latest quarters. But the good
news did not last for very long. At the start of 2022, Russia invaded Ukraine.
Now in this article, I am going to get into Airbus (OTCPK: EADSF), which is a builder of
aircraft, but also a defense/space company. This puts it in a very interesting position with the
travel rebound, the search for more sustainable airplanes, and the extra defense spend
incoming from NAVO in response to the Russia-Ukraine war.
Airbus, just like most airlines, took a hit during Covid. This was mainly because its
commercial aircraft business, which is the biggest revenue driver, took a hit on less use of
planes. Revenues decreased from a record high of €70 billion in 2019 to just €50 billion in
2020. This is an almost 30% drop in revenue. Airlines had to cancel orders and because a lot
of planes were stranded on the ground, service revenue dropped significantly. In 2021, Airbus
was still far away from 2019 levels and reported €52 billion in revenues. In the period 2007-
2016 Airbus grew its revenues very strong from €39 billion in 2007 to €66.5 billion in 2016.
Remarkably to see here is that Airbus even managed to grow in the period 2007-2010,
through the financial crisis, where it only saw a slight drop during 2009.
Airbus is in my personal investment portfolio as I believe Airbus shares are undervalued and
still under pressure from covid impact. Airbus' business is still recovering but will recover
strongly over the next couple of years, supported by global growth trends. Airbus is a huge
player in the production of commercial aircraft but also has strong defense and space
businesses.
I will discuss my reasoning in this initial coverage of Airbus. I rate the company a buy on
strong tailwinds and recession resistance.
Crisis impact in economy of France and stock of airbus
. 2007
The year 2007 was full of economic events, as it witnessed soaring oil prices, a sharp
stabilization of the dollar against major currencies, and the mortgage crisis, the United States,
which uses global repercussions that cost companies and banks tens of billions
The favorable economic situation at the global level contributed to the stock developing an
upward trend that reached its peak in April 2006. At that time, the share price reached 35
euros from then. The global financial crisis also affected the Airbus price, which fell to 9
euros in April 2009. These years were particularly difficult for the company: in 2007 Airbus
had to face a major restructuring of its staff and means of production.
. 2008
In 2008, the face of the global economy changed forever. Investment banks, the secondary
credit market, and an unregulated financial market disappeared. As the free market failed, the
government bought a controlling share in banks and insurance companies.1 The central banks
around the world propped up the financial system. In September of that year, America came
very close to total economic collapse

P a g e 46 | 64
The Global Financial Crisis of 2008-2009 is widely referred to as “The Great Recession.” It
began with the housing market bubble, created by an overwhelming load of mortgage-backed
securities bundled with high-risk loans.

. 2009\2010
The global financial crisis also affected the price of Airbus share, which fell to €9 in April
2009
The uneasy economy continued to dominate the headlines in 2010. Unemployment rates,
climate change, the Federal Reserve and sovereign debt were among the top stories. Dec 23,
2010
. 2011
• Positive Companies' Earnings Not Enough to Encourage Stocks
• Investors Flocked to "Safe" Treasury Bills
• Macroeconomic Concerns Stir Stock Prices
• Overreacting to Events Abroad
• Political Squabbling Frustrates Investors
• Downbeat Economic News
• Unemployment
. 2012
In June 2012, Hollande's Socialist Party won a general majority in legislative elections,
giving it the power to amend the French constitution and allow promised reforms to be
enacted.
Interest rates on French government bonds fell by 30% to record low levels, to less than 50
basis points, higher than German government bond rates.
The share price of airbus reach to 29 euro.
.2014
France is the European champion in electronic management, and it ranked fourth in the world
in this field, based on three criteria: electronic services provided by government
administration, communications infrastructure, and the level of education of the individual.
The law on simplifying corporate governance, adopted in December 2014, enabled
Hopefully, the European Union continued to grow but failed to gain momentum.
There are now fears that France will be affected by the economic malaise in the euro area, as
the country that represents the energy station of the continent of Europe suffered from a
decline in economic activities in the second quarter of 2014.
The price share decreased from 54 euro at the beginning of the year to 42 euro
2015

P a g e 47 | 64
In 2015, the Paris Agreement was made, which aims to reduce greenhouse gas emissions and
limit the increase in temperatures, which led to the obligation of companies to work under
this agreement, including the AIRBUS company the price of shares decreased slightly
2018
In 2018, seven French companies were included in the ranking of the world's 100 most
innovative companies, namely Compound (CEA), Alstom, Airbus, Safran, Saint-Gobain and
Total.
The share price reach 106 euro
2020
The National Institute of Statistics in France confirmed that the economy in 2020 recorded a
record recession since World War II, as a result of the crisis of the outbreak of the Corona
virus epidemic in the country, and the imposition of quarantine, closure and turmoil in
commercial exchanges, which negatively affected companies, including Airbus.
The price share decreased to 58 euro from 132 euro
. 2021
Following the unprecedented recession that it experienced in 2020 due to the Corona virus
pandemic, the French economy achieved an unprecedented growth rate in 52 years,
amounting to 7 percent in 2021. With this growth, France must record one of the best
performance in the euro area commensurate with the magnitude of the shock it suffered. of it
in the previous yearAfter the Airbus share price fell in 2020, it recovered again in 2021,
reaching 112 euro.
2022
French Foreign Trade Minister Olivier Pichette announced during a press conference that his
country's trade deficit doubled in 2022 to reach 164 billion euros, compared to the previous
record of 84.7 billion recorded in 2021. The minister considered that this was due to the
exorbitant cost of energy due to the rise in prices due to The war in Ukraine and the unrest in
the French nuclear sector forced Paris to import electricity
This affected the share price in 2022, which led to a decrease in the share value once again, to
reach 89.49 euro.
4.15. Financial
4.15.1. financial projection

P a g e 48 | 64
 4.15.1.1.Income statement

20.income statement

150000

100000

50000

0
2020 2021 2022 2023 2024 2025 2026 2027

Revenue Cost of Goods Sold (COGS)

Gross Profit Total Expenses
(Figure 20 income statement)
Net Earnings

Revenue 55808 58045 64659 74357.85 85511.53 98338.26 113089 )

130052.3
)
Cost of Goods 44,250 42,518 48,192 42408.96 37319.88 32841.5 28900.52 25432.46
Sold (COGS)
Gross Profit 11558 15527 16467 31948.89 48191.64 65496.76 84188.48 104619.9
Total Expenses 11098 10203 11526 12679.73 14524.04 16063.15 17834.16 19870.72
Net Earnings (1,133) 4,213 4,247 14451.87 25250.7 37075.21 49765.74 63561.87
(TABLE 16 income statement)

4.15.1.2. Balance sheet

21.blance sheet
300000

250000

200000

150000

100000

50000

0
2020 2021 2022 2023 2024 2025 2026 2027

Total Assets Total Liabilities Shareholder's Equity

(Figure 21 balance sheet )

Total Assets 110,095 113,578 115,944 138855.718 238348.2839 145876.9861 143140

Total 99,927 100,362 99,245 78824.76595 75286.13404 72172.65795 69433.439

Liabilities
Shareholder's 6,456 9,486 12,982 60030.95201 163062.1499 73704.32814 73706.32814
Equity
(TABLE 17 balance sheet )

P a g e 49 | 64
 4.15.1.3 Cash flow
Cash from 9935 5471 5542 6473.70 15934.6 25674.5 - 60172.1
Operation 9 7 4 3377.7 1
s 3
Cash from 110,09 113,57 115944. 118,263 120,628 123,041 125,50 128,012
Investing 5 8 00 2
Cash from 5440 -2317 -1181 -1172 -1173 -1174 -1175 -1176
Financing

(TABLE 18 cash flow )

22.cash flow
140000

120000

100000

80000

60000

40000

20000

0
2020 2021 2022 2023 2024 2025 2026 2027
-20000

Cash from Operations Cash from Investing Cash from Financing

(Figure 22 cash flow)

4.16. financial ratios

4.16.1. Liquidity ratios
Liquidity ratios 2018 2019 2020 2021 2022
current Ratio 0.994 0.923 0.95 0.97
0.97
quick ratio 0.5 0.53 0.52 0.56 0.58
Cash ratio 0.31 0.32 0.3 0.33 0.33
(TABLE 19Liquidity ratios )

)
)

P a g e 50 | 64
 23.Liquidty ratios
1.10
1.00
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
-
2018 2019 2020 2021 2022

current Ratio quick ratio Cash ratio

(Figure 23 Liquidity ratios)

) ratios
4.16.1.2 Comments in Liquidity
)
• current Ratio
• We have increasing trend in current ratio. that meaning the company have the
efficiency in meeting short term obligation.
• The reason for increasing current ratio is.
• Increasing the current assets by selling more products , collecting more receivables .
• A quick ratio of less than 1 means that the company does not have enough liquid
assets to fully pay back its current liabilities.
• A cash ratio of less than 1 means that the company does not have enough cash and
cash equivalents to fully pay back its current liabilities
4.14.2 Activity ratio
Activity ratio 2018 2019 2020 2021 2022
Inventory 1.7221 1.9009 1.4555 1.4899 1.4966
Turnover
Receivables 10.4816 12.4212 9.7256 10.3 11.8641
turnover
Payable Turnover 0.66548 0.7673 0.651787533 0.586149 0.811934
total assets 0.553 0.616 0.4534 0.4872 0.5068
turnover
(TABLE 20 Activity ratio)

)
)

P a g e 51 | 64
 14.5
24. Activity ratio
12.5

10.5

8.5

6.5

4.5

2.5

0.5
2018 2019 2020 2021 2022

Inventory Turnover Receivabes turnover Payable Turnover total assets turnover

(Figure 24 Activity ratio)

4.16.2.1Comments in Activity ratio

An inventory turnover A decreasing inventory turnover ratio over the years means that the
company is selling its inventory less frequently and less efficiently. It may indicate that the
company has weak sales, high inventory levels This is lower than the previous year’s ratio of
1.62, and also lower than the industry average of 2.01. This suggests that Airbus Group is
facing some challenges in selling its inventory and managing its cost
o A receivables turnover
company is collecting its receivables more frequently and efficiently.

• A total assets turnover An increasing total assets turnover ratio over the years means
that the company is generating more sales or revenue per unit of assets. It may
indicate that the company has a high asset utilization, a lean operating structure, and a
competitive advantage over its rivals12. A high ratio can also improve the company’s
profitability and return on investment2.
. This implies that the company has a low asset utilization and may have excess or idle assets.
However, the interpretation of total assets turnover depends on the industry,
4.16.3. Profitability ratio
Profitability ratio 2018 2019 2020 2021 2022
Gross profit 11% 13% 10% 18% 20%
margin
net profit margin 4% 5% 2% 8% 9%
Operating Profit 4% 5% 8% 9% 11%
Margin

P a g e 52 | 64
 Return on Equity 22% 31% 18% 44% 33%
Return on assets 3% 3% 1% 4% 4%
Debt-to-Assets 13% 14% 18% 18% 20%
(TABLE 21 Profitability ratio )

25.Profitabilty ratio
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
2018 2019 2020 2021 2022

Gross profit margin net profit margin Operating Profit Margin

Return on Equity Return on assets Debt-to-Assets

(Figure 25 Profitability ratio )

4.16.3.1Comment in Profitability ratio

• Gross profit margin
Airbus Group (EADSY) had a gross profit margin of 20% for the 18%, and also higher than
the industry average of 12.76%. This suggests that Airbus Group is able to earn more profit
per euro of sales than its competitors and has lower production costs
Increasing the net sales by selling more products , expanding the market share , and
launching new products

• net profit margin

Airbus Group (EADSY) had a net profit margin of 8% for the This is higher than the previous
year’s ratio of 7%, and also higher than the industry average of 5%. This suggests that Airbus
Group is able to earn more profit per euro of sales than its competitors and has lower
operating and financing costs.

The company reduced its operating expenses by implementing cost-saving measures,

streamlining its operations, and benefiting from lower research and development costs.

• Operating Profit
Airbus Group (EADSY) had an operating profit margin of 11.33% for ending 2022-. This is
higher than the previous year’s ratio of 9.64%, and also higher than the industry average of
8.76%. This suggests that Airbus Group is able to earn more profit per euro of sales than its
competitors and has lower operating costs.

P a g e 53 | 64
Some possible reasons for the increasing operating profit margin of Airbus Group are
The company increased its gross profit margin by delivering more commercial aircraft,
improving its product mix, reducing its production costs,The company reduced its selling,
general and administrative expenses by implementing cost-saving measures,

• Roe
An increasing return on equity means that a company is earning more income per dollar of
equity and has a higher profitabilityIncreasing the net income by increasing the net sales,
decreasing the COGS, decreasing the operating expenses, decreasing the interest expenses,
decreasing the tax expenses.

• Return on assets
An increasing return on assets means that a company is earning more income per dollar of
assets and has a higher profitability Increasing the net income by increasing the net sales,
decreasing the COGS, decreasing the operating expenses, decreasing the interest expenses, or
decreasing the tax expenses.
4.16.4. operating cycle
operating cycle 2018 2019 2020 2021 2022
no.of days
inventory 211.95 192.01 250.77 244.98 243.89
no.of days
receivables 34.82 29.39 37.53 35.44 30.77
no. of days payable
548.48 475.69 560.00 622.71 449.54
operating cycle
246.77 221.40 288.30 280.42 274.65
net operating cycle
301.70 254.29 271.70 342.29 174.89
(TABLE 22 operating cycle )

)
)
26.operating cycle
800.00
600.00
400.00
200.00
-
2018 2019 2020 2021 2022

no.of days inventory no.of days receivables no. of days payable

operating cycle net operating cycle

(Figure 26 operating cycle)

4.16.4..1Comments
) operating cycle
)
)
P a g e 54 | 64
 • no.of days inventory : increasing number of days inventory over years is that it takes
longer for a company to sell its goods and This can indicate that the company has
weak sales, excess inventory because the company has many order canceled
• no.of days receivables : The meaning of decrease number of days receivables over
years is that it takes less time for a company to collect payment from its customers.
This can indicate that the company has efficient credit
A lower number of days receivables means that the company is more effective in turning its
sales into cash

• number of days payable decreased number of days payable over years is that it
takes less time for a company to pay its suppliers. This can indicate that the company
has efficient cash management, good supplier relationship
A lower number of days payable means that the company is more prompt in settling its
obligations

• operating cycle A higher assumed initial fulfillment rate increases the amount of
inventory on hand and increases the inventory period and the operating cycle.
• A shorter net operating cycle means that the company has less cash tied up in its
operations and more available for other purposes
4.17.FCF
natural/ years 2022 2023 2024 2025 2026
FCF 5,472,000,000 6382540800 6893144064 7444595589 8040163236
PV 214900363636.3
6 232,092,392,727 250,659,784,145 270,712,566,877 292,369,572,227
.27 .46 .09 .26
per share price 130 140.4 151.632 163.76256 176.8635648
(TABLE 26 FCF)

14.1. Natural )
)
27.natural
350,000,000,000
300,000,000,000
250,000,000,000
200,000,000,000
150,000,000,000
100,000,000,000
50,000,000,000
0
2022 2023 2024 2025 2026

fcf pv

(Figure 27 FCF )

)
4.17.The best case )
best/years 2022 2023 2024 2025 2026
P a g e 55 | 64
 FCF 7,472,000,0 8715340800 9412568064 10165573509 10978819390
00
PV 293445818
181.82 316,921,483,6 342,275,202,3 369,657,218,5 399,229,795,9
36.36 27.27 13.46 94.53
per share 178 191.7157895 207.0530527 223.6172969 241.5066806
price
(Table FCF best case )

28.best
450,000,000,000
400,000,000,000
350,000,000,000
300,000,000,000
250,000,000,000
200,000,000,000
150,000,000,000
100,000,000,000
50,000,000,000
0
2022 2023 2024 2025 2026

fcf pv

4.17.1 Comment The best case (Figure 28 FCF best case)

)
Gross commercial aircraft orders increased to 1,078 (2021: 771 aircraft) corresponding to a
net book-to-bill ratio significantly above 1. The order backlog amounted to 7,239
) commercial
aircraft at the end of 2022. Airbus Helicopters registered 362 net orders (2021:
) 414 units),
with a book-to-bill above 1 both in units and value. Helicopter orders were well spread across
programmes and included 12 H160s. Airbus Defence and Space’s order intake by value was €
13.7 billion (2021: € 13.7 billion), corresponding to a book-to-bill of around 1.2.
Consolidated order intake by value increased to € 82.5 billion (2021: € 62.0 billion) with the
consolidated order book valued at € 449 billion at the end of 2022 (year-end 2021: € 398
billion)
Consolidated revenues increased 13 percent to € 58.8 billion (2021: € 52.1 billion). A total of
661(1) commercial aircraft were delivered (2021: 611(2) aircraft), comprising 53 A220s, 516
A320 Family, 32 A330s and 60 A350s. Revenues generated by Airbus’ commercial aircraft
activities increased 15 percent year-on-year,
EBIT Adjusted related to Airbus’ commercial aircraft activities increased to € 4,600 million
(2021: € 3,570 million). The increase reflects the higher deliveries and is supported by some
non-recurring elements

P a g e 56 | 64
 4.17.2The worst case
worst/years 2022 2023 2024 2025 2026
fcf 4,472,000,0 5216140800 5633432064 6084106629 6570835159
00
pv 1756276363
63.64 189,677,847, 204,852,075, 221,240,241, 238,939,460,
272.73 054.55 058.91 343.62
per share 106 114.7421053
price 123.92 133.84 144.54

(TABLE 28 FCF worst case )

) 29.worst
)
300,000,000,000
250,000,000,000
200,000,000,000
150,000,000,000
100,000,000,000
50,000,000,000
0
2022 2023 2024 2025 2026

fcf pv

(Figure 29 FCF worst case)

4.17.2.1. The worst case comment

A decrease in operating cash flow, which could be due to lower revenues caused by cancelled
507 aircraft order and Revenues at Airbus Defence and Space decreased by 2 percent, driven
by Military Aircraft
€ -212 million related to the A400M, of which € -209 million were
€ -38 million negative impact from foreign exchange and balance sheet revaluation, of
which € +127 million were
The financial result was € -315 million (2020: € -620 million). It mainly reflects the net
interest result of € -246 million as well as the revaluation of financial instruments and of
certain equity investments. Consolidated net income(2) was € 4,213 million (2020 net loss: €
-1,133 million) with consolidated reported earnings per share of € 5.36 (2020 loss per share:
€ -1.45).

P a g e 57 | 64
 4.18.per share price

30.per share price

300

250

200

150

100

50

0
2022 2023 2024 2025 2026

per share price per share price (best) per share price (best)

(Figure 30 per share price

)
2022 2023 2024 2025 2026
)
per share 130.00 140.40 151.63 163.76 176.86
)
price
per share 177.51 191.72 207.05 223.62 241.51
price (best)
per share 106.24 114.74 123.92 133.84 144.54
price (best)
(TABLE 29 per share price)

4.19. residual income

31.Residual income

1600000000
1400000000
1200000000
1000000000
800000000
600000000
400000000
200000000
0
2022 2023 2024 2025 2026

PV of Residual income best PV of Residual income lowerPV of Residual income

(Figure 31 residual income)

) P a g e 58 | 64

)
)
 2022 2023 2024 2025 2026
PV of Residual income 1364997763 361556454 957647974 253663729 67190362
best PV of Residual 1364997763 503891160.3 703891360.3 803891360.3 903811360.3
income
Lower PV of Residual 1364997763 427516078 133897653 41936625 13134513
income
(TABLE 30 residual income)

4.19.1.Comment best case )

)
Residual income in Airbus can increase for different reasons, such as:
An increase in net income or operating profit of the company or its divisions, which could be
due to higher revenues, lower costs, or improved efficiency.
A decrease in the opportunity cost of capital or the required rate of return on equity, which
could be due to lower interest rates, lower risk, or higher growth expectations.
According to its latest financial results1, Airbus reported a strong increase in residual income
for the full year 2021, mainly reflecting the higher number of commercial aircraft deliveries,
the good performance of its Helicopters and Defense and Space businesses, as well as its
efforts on cost containment and competitiveness. The company achieved a record net income
of € 4.2 billion and a free cash flow before M&A and customer financing of € 3.5 billion.
4.19.2 The worst case
Residual income in Airbus can decrease for varied reason, such as:
A decrease in net income or operating profit of the company , which could be due to lower
revenues, higher costs cause of increasing of inflation rate and A decrease in operating cash
flow, which could be due to lower revenues caused by cancelled 507 aircraft order and
Revenues at Airbus Defence and Space decreased by 2 percent, driven by Military Aircraft

P a g e 59 | 64
5. Recommendations:

Airbus is a leading global aerospace company that designs, manufactures, and delivers
innovative products and services for the civil and defense markets. Airbus has a strong
competitive position in the industry, with a diversified portfolio of aircraft, helicopters,
satellites, launchers, and services. Airbus also benefits from a large and loyal customer base,
a robust order backlog and a growing presence in emerging markets. The company has a
strong market position and a diversified portfolio of products and services. Airbus has also
demonstrated its resilience and innovation during the Covid-19 pandemic, by adapting its
production and deliveries, launching new digital solutions, and pursuing its environmental
goals. Airbus shares have performed well in the past year, rising by about 40% from €92.30
on May 24, 2022, to €129.24 on May 19, 2023
1.Airbus shares are traded on the Paris Stock Exchange, the Frankfurt Stock Exchange and
the Spanish stock exchanges in Madrid, Bilbao, Barcelona and Valencia. Airbus has a market
capitalization of €102.1 billion as of May 19, 2023.
Airbus has a robust financial situation, with a net cash position of 16.93 billion euros as of
March 2023. The company has also been releasing figures that are above expectations, with a
revenue of 11.76 billion euros and a net income of 466 million euros for the first quarter of
2023. The company’s earnings per share (EPS) was 0.20 euros, beating the consensus
estimate of 0.18 euros.
Airbus has a high valuation, with a price-to-book ratio of 6.99 and a price-to-earnings ratio of
46.71 as of May 19, 2023. However, this reflects the company’s growth potential and its
leadership position in the industry. Airbus is a buy, with an average target price of 143.67
euros, implying a11.2% upside from the current price of 129.24 euros.
Airbus has a positive outlook for the future, as it expects to deliver more than 600
commercial aircraft in 2023 and to reach pre-COVID production levels by mid-2025. Airbus
also aims to increase its market share in the fast-growing segments of urban air mobility and
space exploration. Airbus is committed to innovation and sustainability, as it invests heavily
in research and development and pursues its ambition to achieve carbon-neutral flight by
2035
2.Based on these factors, we believe that Airbus shares offer an attractive opportunity for
investors who are looking for long-term growth and value creation we recommend investors
to invest in stocks of Airbus, as we believe the company offers an attractive opportunity to
benefit from the recovery of the aviation sector and the long-term growth prospects of the
industry

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 1. Conclusion

Airbus is a global leader in the aerospace industry, with a strong position in the single-aisle
market. According to its latest Global Market Forecast¹, Airbus expects the demand for
passenger and freighter aircraft to grow by 3.6% annually over the next 20 years, with a need
for 40,850 new aircraft. Airbus has a diversified portfolio of products and services, including
commercial aircraft, helicopters, defines and space systems, and digital solutions.

and airbus caring such as Environmentally friendly - Airbus has also introduced Blue 5, which
focuses on environmental issues such as saving energy, reducing waste, lowering CO2,
conserving water, and lowering volatile organic compounds. Strong R&D -. Airbus' R&D
spending in 2020 was around 2.86 billion Euros. it held a 58% market share in 2015, compared
to 42% for Boeing. It had a 55% market share in sales, whereas Boeing had a 45% market
share.

Airbus Strategy is based on four strategic priorities that aim to help the company achieve its
mission of being a leader in aerospace. These priorities are: innovation, global expansion,
investment, and sustainability. Airbus wants to keep creating new products and services,
leverage its European heritage in international markets, balance growth and profitability, and
reduce its carbon footprint.

Airbus is affected by the political stability of the regions where it operates. The Brexit deal
between the UK and the EU has created challenges for its trade and currency. The global
security threats have increased the demand for its defence products. However, Airbus cannot
move its production facility out of the EU due to political restrictions. Airbus needs to monitor
the political developments that can impact its business

The aerospace industry depends on the demand for air travel, which is influenced by economic
factors such as income, currency, and oil prices. When the economy is weak, the industry
suffers. When the economy is strong, the industry thrives.

according to economic data we observed increase in GDP over the years from 2017 to 2021.
and same thing in real GDP and mainly the industry GDP decrease from 17.2% in 2017 to
16.5% in 2020 because he effect by Covid-19.

Airbus is a major contributor to the France economy, supporting 9.2billions of euros in GDP,
13000 of jobs, and 1.4 millions of euros in tax revenues. Its impact is felt not only by its own
operations, but also by its supply chain and consumer spending. However, its contribution
declined in 2020 due to the COVID-19 pandemic and its effects on the aerospace industry. and
we have increasing in GDP per capital 7.25% in 2017 to 11.4 8% in2020

Inflation rates affect the exchange rates and the demand for a country’s products. Airbus was
not much affected by the inflation rates in France, which were stable and low in the past four
years. This is a good factor for doing business in France. and for FDI we have increasing from
9.34% in 2017 to 71.4 % 2020

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according to financial data we observed increasing in price of airbus stock from 12.77 in 2008
to 100.68 in 2022
and increasing in Gasoline price in the last 15 years that have impact in airbus sock price and
increasing number of order but airbus face problem in cancellation order and other defects is
high of production cost.

we have positive in net come except in 2020 because Covid-19 and increasing in expenses
because of increasing of inflation and for Profitability of airbus . Airbus Group (EADSY)
had a gross profit margin of 20% for the 18%, and also higher than
the industry average of 12.76%. This suggests that Airbus Group is able to earn more profit per
euro of sales than its competitors and has lower production costs Increasing the net sales by
selling more products , expanding the market share , and launching new products Airbus Group
(EADSY) had a net profit margin of 8% for the This is higher than the previous
year’s ratio of 7%, and also higher than the industry average of 5%. Group is able to earn more
profit per euro of sales than its competitors and has lower operating and financing costs.
The company reduced its operating expenses by implementing cost-saving measures,
streamlining its operations, and benefiting from lower research and development costs. Airbus
Group (EADSY) had an operating profit margin of 11.33% for ending 2022-. This is higher
than the previous year’s ratio of 9.64%, and also higher than the industry average of 8.76%.
This suggests that Airbus Group is able to earn more profit per euro of sales than its competitors
and has lower operating costs

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