Airbus SE

The negative outlook reflects the uncertainty in the air transportation industry and assumptions used in our base case for Airbus. Specifically, we note the risk that demand for new aircraft will remain depressed, potentially leading Airbus to further cut production and engage in more 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 its credit ratios below our current expectations. Ratings downside could materialize if we saw Airbus' operating and financial performance deteriorate beyond current expectations in 2021 and 2022, without a pronounced recovery in civil aircraft production and delivery

...We expect air travel to remain restricted and to recover slowly and unevenly. Airbus' future commercial aircraft sales are closely tied to the recovery of global air travel, which fell by 66% in 2020 and is expected to recover only slowly in 2021 and beyond (see chart 1). The lasting high cash burn in 2021 from airlines adds additional uncertainty and a potential delay to Airbus' rebound. The International Air Transport Association pushed back its recovery forecast by one year, and now does not expect a return to 2019 levels in long-haul until 2024 and short-haul until 2023. We anticipate the significant pressure on the industry and on the 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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