Legacy OEM Financials
Obliterated by SpaceX Mar/May 2026

Space Solutions ($370bn) is the smallest segment but also the most visible — the Starship programme that launches reusable rockets. SpaceX accounts for over 80% of the world’s satellite launches, with its Falcon 9 rockets costing a fraction of thise of Boeing’s Space Launch System; it is becoming a sort of privatised NASA.

The Connectivity segment ($1.6tr) refers to the internet and mobile satellite and is based on Starlink. Starlink promises a new ultra-efficient way to deliver high-speed broadband through a constellation of 10,000 small satellites. It has only 12m users currently but it is designed to become the new standard technology behind the internet, connecting directly to existing smartphones. It is also generating cashflow for Space X.

Because Starship and Starlink are integrated within SpaceX, this creates a huge barrier for competitors, who either have to pay traditional extremely expensive fees to launch their own equipment or negotiate with SpaceX to rent its reusable Falcon 9 rockets.

Starship and Starlink appear to be technologically brilliant but the real value of SpaceX comes from the third segment covering AI infrastructure and Enterprise Software ($26.5tr in total).

Infrastructure is mostly understandable — the hardware, data storage, and computer networks needed to run AI models. Because these data centres and networks are enormously energy-intensive, the SpaceX vision is for them to be moved into space where they can efficiently use solar power. So again there is synergy with Starship and Starlink.

Moving on to Enterprise Applications, and things get fuzzier. This sub-segment, accounting for nearly 80% of the TAM, involves all the AI applications and systems that will evolve to supplement and eventually supplant human intelligence. It is the next industrial revolution, which will change businesses more radically than anything that has gone before and in ways that are as yet inconceivable.

Once the TAM has been established, the methodology for finding SpaceX’s value becomes quite straightforward: estimate how much of each segment of the TAM SpaceX is likely to realise, convert to revenues (eg, Goldman Sachs estimates that AI software sales will grow exponentially from $3bn today to $322bn by 2030), assume a high profit margin because of monopoly control, discount the consequent cashflows, and the end result is $1.8tr. Or $2.8tr according to the more optimistic analysts; or a fraction of that hubristic valuation according to the cynics.

In any case, SpaceX’s valuation obliterates that not only of the two main OEMs but the entire mainstream aerospace industry (and the TAM does not cover future Muskian ventures like settlements on Mars). The combined current stockmarket value of Boeing, Airbus, Raytheon, GE Aerospace, Lockheed Martin, Northrup Grumman, Safran, British Aerospace, Thales, Leonardo, MTU sums to around $1.5tr.

At this point we have to revert to our annual review of the more mundane finances of Boeing and Airbus.

Boeing vs Airbus

Over the past ten years (2016-25) Boeing has accumulated a net loss of ($10.1bn) while Airbus has achieved a total net profit of $27.2bn. But the relatively good news is that it in 2025 both OEMs were profitable — Boeing reported a marginal net profit of $1.9bn, following a massive net loss in 2024 of $(11.8)bn; Airbus was again profitable, $5.8bn or a 6.8% margin on revenues.

For the first time since 2018 Boeing was able in 2025 to produce a balance sheet that showed that it was not technically insolvent. Total assets of $168.2bn exceeded liabilities of $162.8bn, and shareholders’ equity amounted to $5.5bn, while Airbus’s book value was the equivalent of $30.4bn

How did Boeing, America’s premier manufacturer, get itself into this very weak financial state? Our thesis is that policies instigated by CEOs, James McNerney and Dennis Muilenburg, undermined the corporation. They succumbed to the obsession with quarterly results and share price momentum, resulting in unsustainable amounts of cash being returned to shareholders. This phenomenon was prevalent in many industrial sectors in the 2010s, and to a certain extent was also followed by Airbus, but the impact on Boeing was especially harsh, with too little capital being allocated for investment in new products or to ensure production quality or simply to bolster reserves. In short, Boeing focused on financial engineering rather than technological innovation.

Boeing brought in a new CEO, Kelly Ortberg, in August 2024, from Rockwell Collins. He appears to have made progress, partially resolving the various 737 MAX production problems, so that total deliveries in 2025 increased to 600 from to 348 in 2024. The 737 MAX 7 and MAX 10 are due to be certified by the FAA this year while the 777-9 certification progresses, albeit slowly. Reversing the previous outsourcing strategy, Spirit AeroSystems has been bought out and is being integrated in the OEM. Guidance for 2026 indicates a 10% increase in deliveries, improved cashflow and a continuation of the rebuilding of the balance sheet through paying down $46bn of long-term debt.

$bn	2015	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
Total Revenue	96.1	93.4	94.0	101.1	76.6	58.2	62.2	66.6	77.8	66.5	89.5
Net Result	5.2	5.0	8.4	10.5	(0.6)	(11.9)	(4.3)	(5.1)	(2.2)	(11.8)	1.9
Operating Cashflow	9.4	10.4	13.3	15.3	(2.4)	(18.4)	(3.4)	3.5	6.0	(12.1)	1.1
Capex/Acquisitions (net)	(2.4)	(2.9)	(2.0)	(4.8)	(1.5)	(1.0)	(0.5)	(1.2)	(1.6)	(2.2)	(4.1)
Free Cashflow	7.0	7.5	11.3	10.5	(3.9)	(19.4)	(3.9)	2.3	4.4	(14.3)	(3.0)
Net Investment Inflow/Outflow†	0.6	(0.5)	(0.1)	0.2		(17.4)	9.8	5.5	(0.7)	(9.8)	4.6
Net Increase/Decrease in Debt	1.3	0.2	1.4	1.3	13.0	36.2	(5.6)	(1.3)	(5.5)	1.4	(3.5)
Stock Issue										23.8
Share Buy Backs & Dividends	(9.2)	(9.8)	(12.7)	(13.0)	(7.3)	(1.2)					(0.3)
Total financial Flows	(7.3)	(10.1)	(11.4)	(11.5)	5.7	17.6	4.2	4.2	(6.2)	15.4	(3.8)
Net Change in Cash	(0.3)	(2.6)	(0.1)	(1.0)	1.8	(1.8)	0.3	6.5	(1.8)	1.1	(2.2)
Cash Balance (end period)	11.6	9.0	8.9	7.9	9.6	7.7	8.0	14.6	12.7	13.8	11.7

Note: † Refers mostly to the purchase/sale of financial intruments.

Airbus’s 2025 revenues rose by 6% to the equivalent of $85.1bn,on the back on an increase in commercial deliveries to 793 units from 766 in 2024, but Airbus too has suffered supply chain and production problems, especially regarding the GTF engines fitted to A320 NEOs.

€bn	2015	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
Total Revenue	64.5	66.5	59.0	63.7	70.5	49.9	52.1	58.8	65.4	69.2	73.4
Net Result	2.7	1.0	2.4	3.1	(1.3)	(1.7)	4.2	4.1	3.6	4.1	5.0
Operating Cashflow	2.9	4.4	4.4	2.3	3.8	(5.4)	4.6	6.3	6.3	7.4	8.0
Capex/Acquisitions (net)	(3.1)	(3.0)	(2.3)	(2.0)	(2.2)	(1.5)	(1.7)	(2.6)	(3.3)	(4.0)	(3.7)
Free Cashflow	(0.2)	1.4	2.1	0.3	1.6	(6.9)	2.9	3.7	3.0	3.4	4.2
Net Investment Inflow/Outflow	(0.4)	2.2	(0.2)	0.4	(0.7)	5.6	(1.0)	0.2	(0.8)	(2.3)	(0.9)
Net Increase/Decrease in Debt	1.5	1.7		(2.0)	0.3	6.4	(2.0)	(1.1)	(0.1)	(0.4)	(0.6)
Share Buy Backs & Dividends	(1.3)	(1.8)	(1.0)	(1.2)	(1.3)			(1.0)	(1.4)	(2.2)	(2.4)
Total financial Flows	(0.2)	2.1	(1.2)	(2.8)	(1.7)	12.0	(3.0)	(1.9)	(2.3)	(4.9)	(3.5)
Net Change in Cash	(0.4)	3.5	0.9	(2.5)	(0.1)	5.1	(0.1)	1.8	0.7	(1.5)	(0.9)
Cash Balance (end period)	7.4	10.9	11.8	9.3	9.2	14.3	14.2	15.9	16.5	15.0	14.1

Note: † Refers mostly to the purchase/sale of financial intruments.

Airbus’s 2026 target is 870 commercial aircraft deliveries, and it expects adjusted EBIT of $8.7bn compared to $7.1bn in 2025. Its planned output in the short-term for the A320 Family is 44% higher than for the MAX programme — 75 units a month compared to 52. However, the ramp-up of the 320 and A220 programmes continues to be hampered by uncertainty over engine supplies from P&W.

$bn	Revenues	Operating Result	Margin
Commercial Airplanes	41.5	-7.1	-17.1%
Defense	27.2	-0.1	-0.5%
Global Services	20.9	13.5	64.4%
Others and Eliminations	-0.2	-2.0	na
TOTAL	89.5	4.3	4.8%

€bn	Revenues	Operating Result	Margin
Airbus (Commercial)	52.6	4.6	8.7%
Defence	13.4	0.6	4.8%
Helicopters	8.7	1.0	10.9%
Others and Eliminations	-1.5	-0.7	na
TOTAL	73.2	5.5	7.5%

Longer term perspective

The financial tables and the graphs on these pages trace the longer term financial fortunes of the two OEMs and provide some interesting insights into their current positions.

Boeing had historically been a more profitable company than Airbus, with a net result totalling $34.5bn during 2014-18, more than three times that of its European rival. Following various shocks, ranging from the MAX crises to COVID to a major strike in 2024, Boeing has produced major losses, $(35.9)bn during 2019-24 compared to a resilient cumulative profit of $14.0 at Airbus.

Historically, Boeing’s Commercial division has been firmly supported by the Defense Division but in 2025 both were loss-making with all of Boeing profits being generated by Global Services. Boeing is optimistic about its Defense business as loss-making fixed-price government development programmes are being phased out. Airbus is predominantly a civil aircraft manufacturer, but its Defence and Helicopter divisions also contributed to overall profits in 2025.

A major difference between the two OEMs used to be Boeing’s greatly superior ability to generate cash. Operating Cashflow — ie, profits plus depreciation and amortisation, adjustments for deposits and PDPs (these are paid to the manufacturer usually in three or four tranches, based on the list price not the negotiated discounted price, before the airline takes delivery of the aircraft which is when the manufacturer records the revenue), changes in inventories, creditor/debtor balance, etc — was huge at Boeing: $57.2bn during 2014-18, in contrast to just $19.2bn at Airbus. Then everything went wrong — for the period 2019-2024 Boeing’s operating outflow totalled $(35.9)bn, while Airbus generated positive cash of $24.8bn during this period.

In 2025 Boeing managed $1.1bn of positive operating cashflow compared to $9.3bn at Airbus.

Subtracting Capex — which includes new and replacement manufacturing equipment, R&D, investments in or divestment from other companies — from Operating Cashflow gets us to Free Cashflow, which again was historically much stronger at Boeing than Airbus. In 2014-2018 Boeing generated $42.7bn, dwarfing Airbus’s $3.9bn.

In startling contrast, during 2019-2024 Boeing’s Free Cashflow went negative to the tune of $(34.8)bn, despite a near halving in net Capex. Airbus was positive, $8.1bn, on this measure.

In 2025 Boeing’s Free Cashflow was still negative $(3.0bn) compared to a positive $4.9bn at Airbus. (These calculations of Free Cashflow are taken directly from the published accounts; the OEMs may have different definitions.)

Coming into the crises of 2019/20, Boeing found itself with inadequate liquidity, which led to a huge surge in borrowing to cover liabilities and contingencies: during 2019-24 Boeing increased its net debt by a total of $38.2bn, Airbus by a much more modest $3.5bn.

The equity raise of $23.8bn in 2024 partly restored Boeing’s balance sheet but by the end of 2025 Boeing’s balance sheet still carried long-term debt of $45.6bn compared to $19.2bn for Airbus. Still, Boeing now had positive shareholders’ equity of $5.5bn, while Airbus’s book value was the equivalent of $30.4bn. Both OEMs have investment grade ratings, but Fitch rates Boeing’s long-term debt at BBB-, three grades lower than Airbus’s at A.

Boeing has not paid dividends since 2020 and there is little prospect of any in the foreseeable future (apart from some required payments on preferred convertible stock). Airbus, on the other hand, has restored shareholder payments, paid out $2.8bn in 2025 and expects to increase this for 2026.

It is worth recalling what happened to all that cash generated during the good times, 2014-18.

During this period Boeing generated $42.7bn in Free Cashflow but then returned $52.8bn to shareholders in dividends and, especially, through share re-purchases. In other words it paid out more to shareholders than it was generating internally; it was in effect borrowing in order to fund its generosity to shareholders and to senior management whose bonuses were related to the soaring share price. Airbus followed the same policy, albeit on a much smaller scale — generating a total of $3.9bn and paying out $6.8bn.

Such a financial strategy was another example of hubris.