PARIS: European planemaker Airbus gave its starkest assessment yet of damage from the coronavirus crisis, telling the company’s 135,000 employees to brace for potentially deeper job cuts and warning its survival is at stake without immediate action.
In a letter to staff, CEO Guillaume Faury said Airbus was “bleeding cash at an unprecedented speed” and that a recent drop of a third or more in production rates did not reflect the worst-case scenario and would be kept under review. Shares in Europe’s largest aerospace group fell as much as 4 percent and were the biggest loser on the Paris CAC40 index.
Aviation commentator Howard Wheeldon said the letter highlighted the “realization of there being little prospect of a large-scale order recovery any time soon.”
The letter was sent to employees late last week, days before the company is due to give first-quarter results overshadowed by a pandemic that has left airlines struggling to survive and virtually halted jet deliveries since mid-March.
Airbus has begun implementing government-assisted furlough schemes starting with 3,000 workers in France, “but we may now need to plan for more far-reaching measures,” Faury said. “The survival of Airbus is in question if we don’t act now,” he added.
Industry sources have said a new restructuring plan similar to its 2007 Power8 which saw 10,000 job cuts could be launched in the summer, but Faury indicated the company was already exploring “all options” while waiting for clarity on demand.
Sources said Airbus is in active discussions with European governments about tapping schemes to assist struggling industries, including billions of dollars’ worth of state-guaranteed loans.
It has also lent its weight to calls for airlines to be bailed out, believing that manufacturing aid would only defer the underlying problem unless its customers also survived.
Earlier this month, Airbus expanded commercial credit lines, buying what Faury described in the letter as “time to adapt and resize.”
