LONDON – Airbus Chief Executive Officer Guillaume Faury has announced there will be cuts to the production and delivery rates in the wake of the ongoing COVID-19 pandemic.
In an interview with Die Welt newspaper, he said that “for the next two years – 2020/21 – we assume that production and deliveries will be 40% lower than originally planned”.
It has therefore suggested there will be a threat to jobs, especially as information has surfaced stating that restructuring plans are currently in progress.
It is understood that because of a 40% cut in core or “single-aisle equivalent” output, there could be up to 14,000-20,000 jobs at risk as a result.
Faury also added that he does not expect pre-COVID output to return until 2025.
Airbus has set up emergency meetings with the unions about these potential cuts, especially as the manufacturer aims to announce plans on Wednesday.
Whilst Faury didn’t state any details about the restructuring, he said it is all about preservation of the business.
“It’s a brutal fact, but we must do it. It is about the necessary adjustment to the massive drop in production. It’s about securing our future”.
This announcement from Faury comes following his interview with Politico earlier this month, in which the manufacturer has signaled it would sue airlines that are not taking delivery of new aircraft.
This has led to an increase in tensions between the manufacturer and carriers.
Mr. Faury told Politico that some airlines had refused to take calls at the height of the crisis, yet stating that he remained hopeful that some form of compromise will occur.
Mr. Faury stated, “It will remain, I hope, the exception” as he emphasized that Airbus will “always try to find a different route than going to court.”
However, Mr. Faury did add that when airlines have no other choice than fully defaulting and not proposing something better than nothing, lawsuits “will happen.”
However, it was noted that Airbus is bracing itself for another chaotic event such as the 2001 collapse of large Airbus customer, Swissair (SR).
It remains clear that there may be more clarification around the job-cuts later this week, especially as the manufacturer braces itself for what is a very turbulent period in the history of this industry.
It will ultimately be interesting to see how Airbus will fare through this crisis. Like with Boeing, it can be understandable that such cuts have to be made in order to survive, especially if output is not going to be back to normal for another five years.