MIAMI – Airbus CEO, Guillaume Faury warned employees that the company was “bleeding cash at an unprecedented speed”, adding that job cuts would be necessary to survive the crisis.

With Airbus’ Q1 financial results report to be announced on Wednesday, Faury added that the survival of Airbus was in a no immediate action status.

To face the pandemic, the aerospace manufacturer has been implementing cost-saving measures and government assistance actions since March 2020.

Airbus’ position going forward

As worldwide airlines have been cutting orders to preserve cash due to the almost nonexistent demand, the European aircraft assembler had already halted the third part of its production following health guidelines and stock and production status checks on several of its sites.

Now, Airbus must urgently act to reduce its cash hemorrhage and restore its financial balance to recover control of its future, said Faury.

Hence, Airbus’ actions pivot on employment reductions in the form of a Temporary Employment Regulation File (ERTE), as the company has workers without any workload due to the halt of deliveries.

France’s ERTE decision affects employees of its commercial aircraft division at the Toulouse, Nantes and Saint-Nazaire plants, a company spokesperson said. The consortium has 48,000 workers in France and the application of this partial unemployment device will last until May 17.

The company explained that it has reached a similar agreement with the German unions, although it has not yet applied it in that country, and stressed that there is a “negotiation in progress” in the United Kingdom and Spain.

The restructuring would imply over 2,000 affected jobs in the Defense and Space division, reported Spanish media.

Airbus’ pause on production

While the company has paused the majority of its operations in Spain following government measures and leaving arround 2,000 employees in homeworking or without workload, it has implemented government-assisted furlough schemes for 3,000 workers in France.

Photo: Airbus.

Although further operations reductions have been implemented during April according to liquidity and customer support announcements made by Faury, UK sites continue making wings with a 13,500 worker payroll.

Previous Airbus actions to preserve cash flow amid the COVID-19 crisis include the postponement of new A321 assembly line building plans in Toulouse, France, an action that was criticized by French unions for the reduction of employment that it would imply.

It is also understood that output from the plants globally with Airbus would be reduced to around 40 narrow-body jets per month.

Could it all be doom and gloom for Airbus?

Although Airbus’ financials may be in trouble as a result of this pandemic, those in the industry do believe that it will not result in the downfall of the manufacturer.

Greg Waldon of FlightGlobal suggested that it would receive the help of those in Europe as it is “a crucially important industrial program for Europe”.

“I think Europe will be committed to keeping Airbus going. However, there’s going to be a great deal of pain to go through. If they cut production rates quite significantly, you’re going to see large numbers of layoffs. I would expect in a few years you’ll see a smaller leaner Airbus than what we have now.”

It does remain clear that when the results from Airbus are released, then the world can begin to explore what sort of help it requires in order to plow through this pandemic and get back to a normal environment of delivering more output.

Article Written by Sofia Marrero & James Field