Airbus reports £420million losses for first quarter as CEO warns aerospace industry is only on the ‘early stages’ of its ‘gravest crisis’ ever
- Airbus revealed it lost £419 million in the first three months of the year
- It put thousands of workers on furlough and sought billions in loans to survive
- Demand for flights has collapsed due to fears over the coronavirus pandemic
- Here’s how to help people impacted by Covid-19
Airbus is being hit by ‘the gravest crisis the aerospace industry has ever known’, its chief executive warned as the company revealed it lost £419 million in the first three months of the year.
The European manufacturing giant put thousands of workers on furlough and sought billions in loans to survive the coronavirus crisis – which has seen large parts of the continent’s economy locked down to halt the spread.
Revenues were down 15% compared with the same period in 2019, while commercial aircraft deliveries were down from 162 to 122.
Demand for flights has collapsed due to fears over the killer virus, with airlines grounding the majority of their fleets and deferring the delivery of new planes.
Shares in Airbus and Boeing have dropped some 60% this year as customer airlines collapse or seek billions of dollars in government bailouts as the industry facing its toughest challenge yet.
Even after virus-related travel restrictions eventually ease, Chief Executive Guillaume Faury acknowledged it will take a long time to persuade wary customers to get back on planes.
Mr Faury said: ‘We saw a solid start to the year both commercially and industrially but we are quickly seeing the impact of the Covid-19 pandemic coming through in the numbers.
Airbus is being hit by ‘the gravest crisis the aerospace industry has ever known’, its chief executive warned (file photo)
‘We are now in the midst of the gravest crisis the aerospace industry has ever known.
‘We’re implementing a number of measures to ensure the future of Airbus.
‘We need to work as an industry to restore passenger confidence in air travel as we learn to co-exist with this pandemic.
‘We’re focused on the resilience of our company to ensure business continuity.’
Airbus previously announced a plan to cut aircraft production rates by around a third.
Earlier this week it confirmed that more than 3,000 staff working at its site in Broughton, North Wales, will be furloughed.
Analysis of data from the Office for National Statistics shows that, as the number of hospital deaths being reported has declined (blue bar), the number of fatalities being recorded outside of hospitals – mainly in care homes – has risen (red bar). The data used has been backdated and counted by actual date of death, making it appear more stable than the erratic numbers announced each day by the Department of Health, which are counted by the date they are registered
EasyJet has agreed with Airbus to defer the delivery of 24 new aircraft.
The revelation comes as:
- Health Secretary Matt Hancock pledged that from today Department of Health daily updates will include people who died in places other than hospitals
- Schools across England will reopen in ‘phases’ that could mean either older or younger pupils are first back after lockdown
- Coronavirus tests run out just 80 minutes after ministers open screening to all over 65s and key workers – but government co-ordinator says only people with symptoms should apply
- A study shows men who catch coronavirus are more than twice as likely to die from the disease as women
On Tuesday, British Airways-owner IAG revealed plans to make up to 12,000 workers at the airline redundant, equivalent to more than a quarter of staff.
The firm said expects it will be ‘several years’ until demand for air travel returns to 2019 levels.
Airbus was unable to deliver 60 planned planes in the quarter because of virus-related problems, and said the second quarter looks similarly rough.
Customers are asking for delays, which Mr Faury called ‘the biggest issue we are managing at the moment.’
Shares in Airbus and Boeing have dropped some 60% this year as customer airlines collapse or seek billions of dollars in government bailouts (file photo)
Airbus executives expressed hope today that deliveries could start picking up in the second half of the year, but they refused to issue long-term guidance given that the virus is still spreading, and that governments are reluctant to relax international travel restrictions.
U.S. rival Boeing is facing similar woes. Boeing´s CEO said Monday that it will take years for the aircraft-building business to return to levels seen before the coronavirus pandemic.
Airbus has slashed production by a third since the virus hit, and Mr Faury said Airbus will study ‘resizing’ the company after the crisis ebbs – a worrying prospect on a continent where Airbus has factories in four countries and is one of the region’s industrial leaders.
Already 3,000 Airbus workers in France are on temporary unemployment and the number is expected to grow. In addition, 3,200 workers in the U.K. are on furlough and negotiations are under way to put thousands of German workers on short work plans.
A recent letter by Mr Faury warning workers that the company is ‘bleeding cash’ was a shock to many. But Frederic Romain of French union CFTC said ‘the situation requires transparency. It allows workers to open their eyes’ to what´s ahead.
‘Fears? We have a lot of them. For the moment we don´t have a clear vision of what awaits us,’ Mr Romain said.