Coronavirus has created the ‘gravest crisis the aerospace industry has ever known,’ Airbus’ CEO warns as the plane maker’s revenues plunge

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An Air France Airbus A319 aircraft takes off at Paris Charles de Gaulle airport. Reuters
  • Airbus chief executive Guillaume Faury said on Wednesday: “We are now in the midst of the gravest crisis the aerospace industry has ever known.”
  • The company’s revenues fell 13% quarter-on-quarter to $US11.5 billion.
  • Airbus’ comments come a day after Intenational Airlines Group, the parent company of British Airways said on Tuesday it is exploring a new employment structure that could permantly slash 12,000 jobs.
  • The aviation industry has been ravaged by plunging demand as the coronavirus practically shut down air travel in recent weeks.
  • Visit Business Insider’s homepage for more stories.

Pan-European plane-making giant Airbus gave a stark warning about the state of aviation on Wednesday and said the sector is “in the midst of the gravest crisis the aerospace industry has ever known,” as the coronavirus pandemic bites into the company’s profits.

Airbus posted 13% lower revenues of €10.6 billion ($US11.5 billion) as coronavirus continues to erode air travel, lowering the demand for the delivery of new aircraft.

Airbus chief executive Guillaume Faury said: “We are now in the midst of the gravest crisis the aerospace industry has ever known.”

Airbus also warned around 60 aircraft could not be delivered due to the COVID-19 pandemic.

The company reduced its average monthly production rates in early April by one third compared to pre-crisis average levels.

Faury said the company has unveiled a number of measures aimed at restoring consumer confidence as the industry grapples to “co-exist with this pandemic”.

“We’re implementing a number of measures to ensure the future of Airbus. We kicked off early by bolstering available liquidity to support financial flexibility.”


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He added: “We’re adapting commercial aircraft production rates in line with customer demand and concentrating on cash containment and our longer-term cost structure to ensure we can return to normal operations once the situation improves.”

Airbus’ comments come a day after Intenational Airlines Group, the parent company of British Airways said it is exploring a new employment structure that could permantly slash 12,000 jobs. Demand for flights may not return to pre-pandemic levels for years, Chief Financial Officer Stephen Gunning warned in a letter to stock exchanges in Madrid and London.

Increase in high-speed rail

Swiss bank UBS also warned earlier this month in a report that global air travel could slow by 4.6% over the next eight years due to COVID-19, and hasten a move towards rail travel in future.

The report said: “Covid-19 could accelerate the shift from air to rail travel in the EU and China. Clearly, consumers and governments globally are becoming more climate-aware.

“The Covid-19 outbreak is showing industrialised countries not only what clean air means and how to cope without travelling, but also how a cleaner environment and healthier populations cope better with diseases.”

The analysis which primarily focused on Europe and China concluded that lower intra-regional air traffic could weigh on volumes and valuations in the aerospace, airports, infrastructure and oil sectors.

UBS added: “We estimate the European [high-speed-rail] market opportunity to grow to €11bn in 2022 (3.5x 2016 levels), well above the €5.9bn forecast of the European rail industry body UNIFE, suggesting a [capital annual growth rate] up to 10 ppts over the UNIFE base in 2020-30. “