“We are now in the midst of the gravest crisis the aerospace industry has ever known,” said Airbus chief Guillaume Faury this morning as his company announced a swing to a loss in the first quarter.
Aircraft deliveries are down, production has been cut, and the company is “bleeding cash”, threatening its very existence, Mr Faury said. Industrial conglomerate General Electric — which makes engines and other aircraft parts — also reported a “dramatic decline”, with a sharp slowdown in aviation orders.
Airbus customers — the big airlines — face an existential crisis of their own as the coronavirus pandemic chokes off air travel. The rise of video conferencing also puts into question the future of business travel — the most lucrative part of an airline’s operation.
British Airways said yesterday it would cut 30 per cent of its workforce and that passenger levels would take “several years” to recover, just weeks after the company agreed a deal with unions to cut costs and furlough 22,000 workers.
BA’s international rivals are in equally deep holes. SAS, the Scandinavian airline, has announced job cuts; Norwegian said its fleet would remain grounded for the next 12 months; Germany’s Lufthansa is considering filing for creditor protection as negotiations over state aid become embroiled in arguments over bailout conditions; and Air France-KLM has won close to €10bn in state aid from both the French and Dutch governments. In the US, Southwest expects operating revenues to fall as much as 95 per cent in April and May, while Delta says current quarter revenues could drop by 90 per cent.
29/04/20 Financial Times
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Aircraft deliveries are down, production has been cut, and the company is “bleeding cash”, threatening its very existence, Mr Faury said. Industrial conglomerate General Electric — which makes engines and other aircraft parts — also reported a “dramatic decline”, with a sharp slowdown in aviation orders.
Airbus customers — the big airlines — face an existential crisis of their own as the coronavirus pandemic chokes off air travel. The rise of video conferencing also puts into question the future of business travel — the most lucrative part of an airline’s operation.
British Airways said yesterday it would cut 30 per cent of its workforce and that passenger levels would take “several years” to recover, just weeks after the company agreed a deal with unions to cut costs and furlough 22,000 workers.
BA’s international rivals are in equally deep holes. SAS, the Scandinavian airline, has announced job cuts; Norwegian said its fleet would remain grounded for the next 12 months; Germany’s Lufthansa is considering filing for creditor protection as negotiations over state aid become embroiled in arguments over bailout conditions; and Air France-KLM has won close to €10bn in state aid from both the French and Dutch governments. In the US, Southwest expects operating revenues to fall as much as 95 per cent in April and May, while Delta says current quarter revenues could drop by 90 per cent.
29/04/20 Financial Times
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