In what is seen as a major blow to the company, Airbus SE shares have dropped heavily on the day after Delta Airlines decided to delay its $5billion aircraft order from the company until after 2022. This order deferment adds to the growing list of problems for companies operating in the aviation space, already severely hit by the coronavirus pandemic.
Delta Airlines, faced with a cash crunch as its initial stimulus money has run out, was forced to defer the aircraft orders. These orders would have seen Airbus supply $2 billion worth of aircraft in 2020 alone.
Delta’s quarterly results are worse than the markets had expected, and the company hopes to condense its operations so it can ride out the three years that aviation analysts have predicted it would take the industry to recover to pre-pandemic levels. Flight cuts and layoffs are part of this expansive plan by Delta.
Airbus shares on the DAX are down 3.49% Tuesday on the news.
By today’s downside move, Airbus stocks have broken below the ascending channel on the daily chart, and now approaches the
61.77 resistance where previous lows of late July/early August 2020 reside. A break below this level targets 59.90, with 57.85 rounding off potential support to the downside in the near-term.
If Airbus can shake off this news and rise above the bearish sentiment, we could see a bounce which targets 68.15, with 71.47 and 75.13 lining up as potential resistance areas to the north.
