Airbus bolsters financial liquidity and resumes production in Europe

Aircraft manufacturer Airbus has bolstered its financial stability in response to coronavirus, and announced it has resumed production at its sites in France and Spain.

The group, which employs more than 6,000 staff at its wing-making plant in Broughton, near Chester, has withdrawn its guidance for financial year 2020 due to the volatility of the current situation with many countries in lockdown which has severely affected the travel and aviation industries.

It has also secured a new credit facility worth €15bn in addition to the existing €3bn revolving credit facility, withdrawn the 2019 dividend proposal with an overall cash value of approximately €1.4bn, and suspended the voluntary top-up in pension funding.

It said: “Operational scenarios, including measures to minimise cash requirements, have been identified and will be activated depending on the further development of the pandemic.

“With these decisions, the company has significant liquidity available to cope with additional cash requirements related to the coronavirus.

“Liquidity resources previously standing at approximately €20bn, comprising around €12bn in financial assets at hand and around €8bn in undrawn credit lines, were further bolstered by converting an existing €5bn credit line into a new facility amounting to €15bn. Available liquidity now amounts to approximately €30bn.”

The group also announce it expects production and assembly work to partially resume in France and Spain today (March 23) following health and safety checks after the implementation of stringent measures.

Airbus said it has carried out extensive work in coordination with its social partners to ensure the health and safety of its employees, while securing business continuity.

The implementation of these measures required a temporary pause in production and assembly activities at the French and Spanish sites for a period of four days.

Work stations will only re-open if they comply with the new health and safety measures in terms of hygiene, cleaning and self-distancing while improving the efficiency of operations under new working conditions.

The same measures are being deployed across all other sites without full interruption.

In February, the Airbus final assembly line in Tianjin, China, the epicentre of the coronavirus outbreak, re-opened following a temporary production stoppage related to the coronavirus outbreak and is now operating efficiently, it said.

And in the past days, the company has donated thousands of face masks to hospitals and public services around Europe and has started to use its test aircraft to obtain larger quantities from suppliers in China.

A first flight with a test A330-800 aircraft has this weekend transported approximately two million masks from Tianjin back to Europe, of which the large majority will be donated to the Spanish and French authorities. Additional flights are planned to take place in the coming days.

Airbus chief executive, Guillaume Faury, said: “Our first priority is protecting people while supporting efforts globally to curb the spread of the coronavirus.

“We are also safeguarding our business to protect the future of Airbus and to ensure we can return to efficient operations once the situation recovers.

“I am convinced that Airbus and the broader aerospace sector will overcome this critical period.

“I’d like to salute the strong commitment from our employees to ensure business continuity in close cooperation with our social partners and other stakeholders.

“At the same time we are doing all we can to support those on the frontline to fight the coronavirus and limit its spread. We try to live up to our values, humbled by the complexity of the situation, and contribute as much as we can to society in these very difficult times.”

The group statement added: “By maintaining production, managing its resilient backlog, supporting its customers and securing financial flexibility for its operations, Airbus intends to secure business continuity for itself even in a protracted crisis.

“Safe and efficient air travel is a key backbone of global economic development and cultural exchange.

“Airbus, therefore, highly welcomes governmental efforts around the globe to stabilise this industry by supporting the financial health of its airline customers and its suppliers. Airbus continues to monitor the overall health of the industry.”