Expect significant new tariffs on Chinese imports and moderate levies on goods from other nations , as President-elect Donald Trump rolls out his protectionist agenda. However, with his preference for chaotic policymaking and sudden shifts , there’s uncertainty on how soon these import taxes will actually hit. Dubbed “ Tariff Man ,” Trump aims to use tariffs both strategically and tactically . He’s mentioned taxing all Chinese goods up to 60% and potentially setting 10%-20% tariffs on imports globally , but details on these plans remain vague . Key players within Trump’s team are divided: Robert Lighthizer , a staunch tariff advocate, sees permanent duties as crucial to balance US trade , while others, like billionaires John Paulson and Scott Bessent , view tariffs as temporary leverage. Trump’s previous administration had mixed feelings, especially on national security-related trade limits , which he sometimes dismissed, favoring an “open for business” approach. High-profile busin
Airbus SE’s operating profit dropped by over half in the second quarter due to significant charges at its space division, coupled with reduced aircraft deliveries.
Key Takeaways:
Earnings Drop: Adjusted earnings before interest and taxes fell 56% to €814 million (RM4.09 billion) for the three months ending in June. The company incurred a €989 million charge at its space unit in the first half of the year, higher than previously forecasted.
Production Challenges: Airbus faces production constraints, unable to build aircraft fast enough to meet the high demand for fuel-efficient jets. This situation has led the company to decline some prospective customers as its popular models are sold out into the next decade. Rival Boeing Co also faces similar production slowdowns.
Parts Shortage: A shortage of components, including engines and cabin interiors, forced Airbus to cut its annual delivery target to 770 units and delay the monthly production rate increase of A320neo jets by a year. This reduction in deliveries impacts cash flow, prompting a revised operating profit and free cash flow outlook for the year.
Market Conditions: Despite strong travel demand, Airbus’s commercial aviation head, Christian Scherer, mentioned at the Farnborough Airshow that a potential slowdown in demand could ease production pressures. However, no customers have requested delivery deferrals yet. The A321neo model is sold out until 2031, and the A350 is unavailable until 2030.
Financial Outlook: Airbus maintains its expectation of adjusted earnings before interest and tax of €5.5 billion for the year, down from an initial goal of up to €7 billion. Free cash flow before customer financing is projected at about €3.5 billion.
Cost-Cutting Measures: In response to the challenging environment, Airbus has launched a savings plan called Project Lead, which includes reducing internal travel and events and seeking cost-cutting measures within individual departments.
Space Systems Review: Airbus has initiated a comprehensive review of its space systems unit, reassessing project timelines and risks. The company is exploring all strategic options, including restructuring, portfolio review, cooperation, and mergers and acquisitions for the unit.
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