Airbus SE

The negative outlook reflects the uncertainty in the air transportation industry and assumptions used in our base case for Airbus, in particular the risk that demand for new aircraft will be lower than we currently expect, leading Airbus to further cut production and engage in a higher level of restructuring than currently anticipated. Although this is not our current expectation, in such a scenario, we would assume Airbus would not be able to generate positive free cash flow, which would increase the amount of financial debt and weaken credit ratios below our current expectations. Ratings downside could materialize, if we saw Airbus' operating and financial performance deteriorate beyond current expectations in 2020, without a pronounced recovery in civil aircraft production

...We expect a slow recovery of the air transport industry and a return to pre-crisis levels in 2023 at the earliest. Demand for Airbus' commercial aircraft is tied to growth in global air travel, which is expected to fall by 68% in 2020, recovering only slowly in 2021 and beyond (chart 1). According to the International Air Transport Association's (IATA) forecast, a return to the level of 2019 does not occur until 2023 (chart 2). We expect significant pressure on the industry and on balance sheets of Airbus' customers will persist through 2021 and then gradually ease when an effective vaccine is widely available for the public....

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