Airbus employees, a total of 135,000 people, have been warned of possible deeper cuts in jobs, the European plane maker said in a bleak assessment about the the impact of the coronavirus pandemic crisis on its business. The airline has also warned that its very existence is at stake because of the pandemic crisis if no immediate action was taken.
Airbus was "bleeding cash at an unprecedented speed", said the company’s Chief Executive Guillaume Faury in a letter to staff, and added that a the worst-case scenario was not reflected in the recent step of cutting down of production by one third. The company is still keeping the situation under review
There was however no official comment made in this regards.
The company sent the letter to the employees at the end of last week even while the company is set to announce its results for the first quarter which is expected to be deeply overshadowed by the pandemic. Travel restrictions because of the crisis have hit airline industry very hard and many are struggling to survive. Airbus has virtually halted jet deliveries since mid-March.
Government-assisted furlough schemes have already been implemented by Airbus has begun beginning 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.
Sources in the industry have said that the aircraft maker could implement a new restructuring plan like the Power8 plan that was implemented in 2007 in which 10,000 jobs were cut and this could be launched this summer. But the company was already exploring "all options" even while it was waiting get a clear idea on demand, Faury indicated.
There is also an acting discussion ongoing between European governments and Airbus about schemes that it could use for assistance for the struggling industries which includes state-guaranteed loans, said industry sources.
It has already expanded commercial credit lines with banks, buying what Faury described as "time to adapt and resize".
The company slashed down the production of its benchmark narrow-body jet s by one third to just 40 planes a month earlier this month in an effort to stop the outflow of cash. The company also issued targets for wide-body jets with cuts of up to 42 per cent compared with rates that were previously announced.
"In other words, in just a couple of weeks we have lost roughly one-third of our business," Faury wrote in the letter, according to reports. "And, frankly, that's not even the worst-case scenario we could face".
The new reduced production targets will be implemented by Airbus for as long as it would be deemed necessary to get a clearer idea about demand through thorough assessment, Faury said. He indicated that this could be for between two and three months.
The shape and pace of a recovery could not be predicted under the current circumstances, he said, and talked of a various scenarios, including one with a short and deep crisis but a fast rebound, and another which would be a longer and more painful crisis and pre-pandemic demands not coming before 5 or 10 years.
(Source:www.news18.com)
Airbus was "bleeding cash at an unprecedented speed", said the company’s Chief Executive Guillaume Faury in a letter to staff, and added that a the worst-case scenario was not reflected in the recent step of cutting down of production by one third. The company is still keeping the situation under review
There was however no official comment made in this regards.
The company sent the letter to the employees at the end of last week even while the company is set to announce its results for the first quarter which is expected to be deeply overshadowed by the pandemic. Travel restrictions because of the crisis have hit airline industry very hard and many are struggling to survive. Airbus has virtually halted jet deliveries since mid-March.
Government-assisted furlough schemes have already been implemented by Airbus has begun beginning 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.
Sources in the industry have said that the aircraft maker could implement a new restructuring plan like the Power8 plan that was implemented in 2007 in which 10,000 jobs were cut and this could be launched this summer. But the company was already exploring "all options" even while it was waiting get a clear idea on demand, Faury indicated.
There is also an acting discussion ongoing between European governments and Airbus about schemes that it could use for assistance for the struggling industries which includes state-guaranteed loans, said industry sources.
It has already expanded commercial credit lines with banks, buying what Faury described as "time to adapt and resize".
The company slashed down the production of its benchmark narrow-body jet s by one third to just 40 planes a month earlier this month in an effort to stop the outflow of cash. The company also issued targets for wide-body jets with cuts of up to 42 per cent compared with rates that were previously announced.
"In other words, in just a couple of weeks we have lost roughly one-third of our business," Faury wrote in the letter, according to reports. "And, frankly, that's not even the worst-case scenario we could face".
The new reduced production targets will be implemented by Airbus for as long as it would be deemed necessary to get a clearer idea about demand through thorough assessment, Faury said. He indicated that this could be for between two and three months.
The shape and pace of a recovery could not be predicted under the current circumstances, he said, and talked of a various scenarios, including one with a short and deep crisis but a fast rebound, and another which would be a longer and more painful crisis and pre-pandemic demands not coming before 5 or 10 years.
(Source:www.news18.com)
