Performance: -15.5%
Paris-listed Airbus SE was one of the bigger losers in our portfolio for the four-month period, with a 15.5% loss. The company is a global aeronautics and space company that operates three main segments, which are Airbus aircraft, defence and space, and helicopters. The case for investing in the company is that it should benefit greatly from the global pandemic recovery and the reopening of economies. Travel demand should pick up as pandemicrelated fears subside, greatly benefitting aircraft manufacturers such as Airbus.
However, higher fuel prices, as well as slowing economic growth in the US, Europe and China, along with inflation, have weighed on consumer demand for air travel over the past few months, thus adversely impacting the company’s share price. We believe that consumer demand for air travel will eventually pick up, as there is still much room to return to pre-pandemic levels. Higher build rates for the Airbus A320 family of aircraft, which have higher margins, should greatly boost the company’s earnings once air travel returns to pre-pandemic levels. Further, the demand for more modern, fuel-efficient and low-emissions aircraft from airlines globally should also improve Airbus’ earnings and margins as it focuses on its more profitable narrow-body aircraft.
