Airbus Lands Game-Changing A220 Megadeal Before Steep Q1 Earnings Hit

Airbus secures largest-ever A220 order (150 jets from AirAsia) while Q1 civil aircraft profit drops 84%, production hampered by engine shortages and China bottlenecks.

The European aerospace group is navigating one of its starkest contradictions in years: a record-breaking order for its A220 narrowbody just as first-quarter results reveal a punishing 84% profit dive in its civil aircraft division. Airbus confirmed this week that AirAsia has signed for 150 A220 jets, pushing the programme past the 1,000-firm-order milestone and marking the largest single order in the model’s history.

AirAsia plans to deploy the aircraft across its Asian network in a high-density 160-seat configuration made possible by additional over-wing emergency exits. Tony Fernandes, the budget carrier’s chief executive, pointed to the need to cut operating costs as a driving factor. The A220 consumes roughly 20% less fuel than the older A320ceo generation and offers a range of up to 6,700 kilometres. Airbus had already handed over more than 500 units of the type by the spring, a number that will swell when deliveries to AirAsia begin in the first quarter of 2028.

Those achievements, however, sit uneasily alongside the first-quarter figures the planemaker released days earlier. Consolidated revenue slipped to €12.7 billion, while adjusted operating profit tumbled 52% to just €300 million. The civil aircraft unit bore the brunt of the damage, churning out only 114 jets as engine shortages from Pratt & Whitney and administrative bottlenecks in China stalled production. Rival Boeing managed to deliver 143 aircraft in the same period, a rare quarterly lead over Airbus. The company did caution that it expects a positive cashflow in the second quarter as inventory backlogs clear.

Defence and space provided a counterweight. Order intake in that division nearly doubled to €5 billion, and revenue rose 7%. Airbus is also quietly building a European cyber-security network through a string of bolt-on deals: the April acquisition of French specialist Quarkslab follows the earlier purchase of Germany’s Infodas and the planned buyout of Britain’s Ultra Cyber.

The pressure to translate a bulging order book into stronger margins now falls partly on a new strategy chief. Eric Kirstetter, a former Roland Berger partner, takes over the role in mid-May from Matthieu Louvot, who moved into the operational arm of Airbus Helicopters. Meanwhile, Airbus is actively chasing opportunities in South Asia: talks are ongoing with the Bangladeshi government as the national carrier Biman re-evaluates its fleet, having signed a $1 billion-plus deal for 14 Boeing jets just weeks ago.

Investors have so far been unimpressed. The Airbus stock ended Friday at €45.00, nearly 5% below its 200-day moving average, with an RSI reading of 10.9 that screams extreme oversold. Management is sticking to its full-year target of roughly 870 commercial aircraft deliveries, but April’s tally of just 67 units suggests the ramp-up remains tough. If the cashflow inflection materialises as promised, the second half of 2025 will need to show whether the order boom can finally start lifting the share price.