Future of Airbus in jeopardy without drastic action, boss warns

Aircraft manufacturer Airbus has warned of deeper job cuts as a result of the coronavirus pandemic.

The group, which employs more than 6,000 staff at its wing-making plant in Broughton, near Chester, contacted staff by internal letter last Friday warning that the business is “bleeding cash at an unprecedented speed”.

Aircraft orders have virtually stopped after the world’s airlines were grounded due to social distancing measures.

In March this year Airbus revealed that it received no new orders from customers during the February period.

The letter from chief executive Guillaume Faury, seen by news organisations including business news group Bloomberg, told the group’s 135,000 staff to brace for potentially deeper job cuts and warned that the very survival of Airbus is at stake without immediate action.

Mr Faury said the recent cut in production of more than a third did not reflect the worst scenario case for the group, and would be kept under review.

He wrote: “The survival of Airbus is in question if we don’t act now.”

Airbus has already started to furlough staff, including 32,000 staff in France, but Mr Faury added: “we may now need to plan for more far-reaching measures.”

The group is understood to be in discussions with governments around Europe about accessing their assistance schemes for struggling industries, but some industry sources have warned the group could be facing a similar restructuring plan to its 2007 cutbacks which saw 10,000 job losses.

Mr Faury said Airbus is exploring “all options” in the meantime.

The group has already expanded commercial credit lines with banks, buying what Mr Faury described as “time to adapt and resize”.

Depending on how badly the pandemic affects world travel, the group could have to reduce output by up to a half.

Mr Faury said it was too early to judge what form the recovery could take, but referred to scenarios including a short and deep crisis with a fast rebound or a longer and more painful downturn with previous demand levels only returning after five or 10 years.

Analysts and airlines have so far mostly spoken of a downturn lasting no more than 3-4 years.

Mr Faury wrote: “Unfortunately, the aviation industry will emerge into this new world very much weaker and more vulnerable than we went into it.”