“In just a couple of weeks we have lost roughly one-third of our business. And, frankly, that’s not even the worst-case scenario we could face.”
Those are the stark words of Airbus chief executive Guillaume Faury.
The aerospace and defence firm, which employs thousands in its supply chain, sent a letter to staff laying out the problems it faces as the aviation industry is hit hard by Covid-19, The Independent reported.
In fact, Airbus has warned it is “bleeding cash at an unprecedented speed” and may not survive the coronavirus pandemic unless it cuts some of its 135,000 jobs globally.
“The survival of Airbus is in question if we don’t act now,” Faury wrote.
He added: “We’re bleeding cash at an unprecedented speed, which may threaten the very existence of our company. We must now act urgently to reduce our cash-out, restore our financial balance and, ultimately, to regain control of our destiny.”
Airbus has seen the majority of flights cancelled as countries attempt to slow the spread of Covid-19 across the globe, The Independent reported.
That has caused a plunge in demand for aircraft with few signs of an upturn in the coming months and some analysts forecasting a long-term decline in the volume of flights after the immediate health crisis is contained.
“The aviation industry will emerge into this new world very much weaker and more vulnerable than we went into it,” Faury said.
Airbus has started to take advantage of furlough schemes offered by governments to cover wages, with 3,000 employees in France placed on a leave of absence, the Independent reported.
Earlier in April, British low-cost carrier EasyJet said it would defer delivery of at least 24 Airbus aircraft, which it was due to receive over the next three years, Market Watch reported.
Airbus, the world’s biggest commercial aircraft manufacturer, is due to report first-quarter results on Wednesday.
The plane maker said on April 3 that it will slash aircraft production of its popular A320 single-aisle jet by a third from 60 to 40 as it tries to protect the company’s balance sheet, Market Watch reported.
It will also cut production of its A330 planes to two and A350s to six.
Meanwhile, Virgin Australia collapsed into administration last week, while sister airline Virgin Atlantic confirmed Monday that it was on the hunt for outside investors to keep it alive, CNN Business reported.
Billionaire founder Sir Richard Branson has said he would offer his Necker Island estate in the Caribbean as collateral to raise cash.
Carriers around the world face a “mounting financial crisis” and could lose as much as US$314 billion in revenue this year, according to the International Air Transport Association, CNN reported.
The collapse in air traffic puts around 6.7 million jobs at riskin Europe, IATA said in a statement last week, calling for urgent government action to “preserve air services.”
The governments of France and the Netherlands have heeded the call, stumping up billions of euros to support Air France-KLM, in which they each already own a 14% stake, CNN reported.