Boeing has been joined by the other mega-sized aircraft builder, Airbus, with financial woes. According to industry analysts, the cash-flow and demand problems will result in deep employee cuts in the future. One might say that Boeing welcomes the company since Airbus has been eating into Boeing customer base in the wake of the 737 MAX disaster.
Guillarme Faury, CEO of Airbus said; “The survival of Airbus is in question if we don’t act now,” he wrote in a letter to staff sent on April 24th. Airbus was “bleeding cash at an unprecedented speed,” Faury said. “We must now act urgently to reduce our cash-out, restore our financial balance and, ultimately, to regain control of our destiny.”
The comments come three weeks after Airbus decided to cut production by around one-third across the board. The company had decided on April 8th to reduce monthly A320/A320neo family output to 40 aircraft, A330/A330neo to two per month and the A350 to six per month.
Airbus has cut production, implemented furloughs and slowed future development spending but is not shielded from further problems as the industry faces its worst crisis.
Airbus expanded furlough schemes this week by sending home 3,200 workers in Britain after putting 3,000 workers on government-backed partial unemployment schemes in France, and the group said thousands of German staff could also be affected.
The company has not ruled out mandatory job cuts but says it is taking time until around June to understand airline demand and the shape of the economic recovery to assess further steps. Faury said the crisis threatened the situation of roughly 3,200 aerospace suppliers in France and called for joint industry action to protect the fragile sector.
French Finance Minister Bruno Le Maire said earlier this week that the French state was ready to provide “massive” support to Airbus, if the circumstances arose.
After years of booming orders Boeing and Airbus are sitting on aircraft backlogs stretching out as far as eight or nine years. Those backlogs are now in jeopardy. Carter Copeland, aerospace analyst with Melius, said there would have to be a more than 30 per cent cut in global aircraft output — against 2018 levels — to eliminate excess passenger jets from the production system by 2021.
This will impact not just Boeing and Airbus, but a supply chain already suffering from the grounding of the 737 Max for more than a year.
