Airbus' inability to build and deliver jets on time -- especially the A321neo -- has prevented it from fully capitalizing on the Boeing 737 MAX grounding.
The two fatal Boeing (NYSE:BA) 737 MAX crashes -- and the subsequent grounding of that model -- have captured most of the headlines in the aviation world over the past year. Indeed, Boeing has suffered a big setback to its reputation and financial performance.
However, Airbus (NASDAQOTH:EADSY) has been unable to capitalize on Boeing's woes for the most part. That's because the European aircraft manufacturer's dreadful operational performance has continued in 2019. Airbus is falling short of its delivery targets, its profit and cash flow are under pressure, and customers are becoming fed up.
Airbus' subpar performance continues in 2019
Last week, Airbus reported its financial results for the first half of 2019, and the numbers weren't pretty. On the bright side, the company posted an adjusted operating profit of 2.5 billion euros ($2.8 billion) in the first half of the year, more than double the profit it generated a year earlier. This compared favorably to Boeing's $1.8 billion operating loss over the same period.
The 737 MAX grounding caused Boeing to report a huge loss last quarter. Image source: Boeing.
That said, Boeing took a $5.6 billion one-time charge last quarter related to the compensation it expects to provide to airlines with grounded 737 MAX jets. Without that charge, Boeing would have posted an operating profit of around $3.8 billion in the first half of the year, eclipsing Airbus' results despite not delivering its most popular product for most of that period.
Moreover, Airbus burned 4 billion euros ($4.5 billion) of cash in the first half of 2019 due to the inefficiency of its production system. (Airbus tends to have extremely seasonal cash flow.) Boeing generated $1.3 billion of free cash flow over the same period of time, notwithstanding a huge headwind from being unable to deliver the 737 MAX jets it has been building since March.