Coronavirus Outbreak: Airbus Q1 profit plunges as pandemic crisis starts to bite; lockdowns hamper aircraft delivery

Airbus suspended its outlook and dividend and negotiated new credit lines last month.

Reuters April 29, 2020 19:34:29 IST
Coronavirus Outbreak: Airbus Q1 profit plunges as pandemic crisis starts to bite; lockdowns hamper aircraft delivery

Paris: Airbus on Wednesday posted a 49 percent slump in first-quarter core profit and called for an industry-wide campaign to restore confidence in flying after the coronavirus pandemic triggered the “gravest crisis the aerospace industry has ever known”.

Europe’s largest aerospace group also highlighted plans to save cash after gushing 8 billion euros in the first quarter, including a record 3.6-billion-euro fine to settle corruption investigations in Britain, France and the United States.

“All nature of costs are now being reviewed,” CEO Guillaume Faury told analysts.

 <span class=Coronavirus Outbreak Airbus Q1 profit plunges as pandemic crisis starts to bite lockdowns hamper aircraft delivery" width="380" height="285" />

Representational image. Reuters

Airbus has been unable to deliver more than a handful of aircraft since Europe-wide lockdowns began in mid-March and Faury said he expected similar difficulties in the second quarter before a clearer picture emerges in around June.

Chief financial officer Dominik Asam told a telephone news conference he expected some recovery in the third quarter before returning “basically to a neutral situation where we don’t use cash anymore” in the fourth.

Airbus expanded furlough schemes on Tuesday by sending home 3,200 workers in Britain after putting 3,000 workers on government-backed partial unemployment schemes in France, and Faury said thousands of German staff could also be affected.

He did not say whether Airbus would carry out forced redundancies but told staff last week to prepare for “more far-reaching measures” to balance the group’s costs to the reduced outlook for aviation in coming years.

“We are doing everything we can to be in the best shape for competing again later,” Faury said on Wednesday.

Click here to follow LIVE updates on coronavirus outbreak

Airbus said first-quarter adjusted operating profit fell 49 percent to 281 million euros ($304.7 million) as revenue dropped 15 percent to 10.631 billion euros, mainly due to clouds that were already gathering over jetliner demand before the coronavirus outbreak.

June production review 

Planemakers, airlines and suppliers have been left reeling by the pandemic, which has crippled passenger travel and catapulted major economies into recession.

Airbus suspended its outlook and dividend and negotiated new credit lines last month.

It said on Wednesday it does not immediately see a need for further government support.

Airbus this month cut jet production by between one third and 42 percent depending on the model, compared with previously announced rates. It could cut production again after reviewing the situation in June if a new surplus builds up, Asam said.

Industry sources say Airbus is currently producing few aircraft as it adapts to social distancing rules.

Airbus will reduce 2020 capital expenditure by around 700 million euros to around 1.9 billion euros and defer or suspend activities which are “not critical”, Faury said.

However, he stressed that Airbus continues to develop its fast-selling A321XLR.

Reuters reported on Tuesday that planemakers are drastically slowing other new projects to save cash.

In the longer term, Airbus remains committed to a new generation of green aircraft, and will intensify a focus on onboard passenger health as well as safety, Faury said.

Updated Date:

also read

Over 3.09 crore unutilised vaccine doses available with states and private hospitals, says Centre
India

Over 3.09 crore unutilised vaccine doses available with states and private hospitals, says Centre

It said that more than 45.37 crore vaccine doses have been provided to states and UTs so far through all sources and a further 59,39,010 doses are in the pipeline

COVID-19 vaccine production increasing, India may be first country to have DNA-based jab, Mansukh Mandaviya tells RS
India

COVID-19 vaccine production increasing, India may be first country to have DNA-based jab, Mansukh Mandaviya tells RS

Replying to a short discussion on COVID-19 management in Rajya Sabha, the minister said technology transfer to several companies has started and they will begin production in the coming days

COVID-19: Pakistan bans domestic air travel for unvaccinated as cases cross 1 million mark
World

COVID-19: Pakistan bans domestic air travel for unvaccinated as cases cross 1 million mark

The travel restriction, imposed by the National Command and Operation Centre (NCOC), will be applicable from 1 August on unvaccinated people of over 18 years of age