Staff reductions will stretch beyond the commercial aviation division with the helicopter and defence units also set to lose headcount

LONDON • Airbus SE is meeting with European labour unions this week as it prepares to slash thousands of jobs and scale back on its planemaking operation for a prolonged downturn, according to people familiar with the matter.

Faced with a slump that could last until 2025, Airbus may not be able to avoid mandatory job cuts, one of the sources said. Staff reductions will stretch beyond the commercial aviation division hit hard by the coronavirus, with the helicopter and defence units also set to lose headcount, said the source, who asked not to be named discussing confidential matters.

The Toulouse, France-based planemaker has so far prioritised voluntary measures such as early retirement as it fine-tunes a plan to cut costs. It is also exploring ideas like shorter working weeks to ease the impact on employees and minimise backlash in its home countries of France and Germany, which have committed billions to aid aviation. These measures alone are not likely to generate the cash savings required for an extended period of lower demand, the source said.

Airbus must “limit” job cuts as much as possible, a French minister said yesterday. Junior Economy Minister Agnes Pannier-Runacher told BFM Business that she understood an adjustment was necessary with the drop in orders but that the French aerospace plan was designed to help the industry through the crisis.

The aircraft manufacturer has seen demand for its planes dry up along with global travel this year after the virus spread across the globe. CEO Guillaume Faury has been warning for weeks that urgent action is needed to stem cash outflows.

Faury told German newspaper Die Welt in an interview on Monday that the company is bracing for production and deliveries about 40% lower for the next two years and the solutions available to help mitigate the impact “will not be enough”.

The 40% figure is consistent with targets first announced in April, and reflects the shortfall measured against pre-coronavirus plans to increase output levels through 2023.

Shares in the Toulouse gained 3.3% to €65.43 (RM314.06) as of 9:18am in Paris yesterday, paring the drop this year to 50%.

In April, Airbus said it would reduce output of its mainstay A320 series narrow-body by one-third, with larger cutbacks on its wide-body A330 and A350 aircraft.

The company is meeting with unions this week, the source said. The impact on jobs will be worse than under a prior restructuring called Power8 more than a decade ago, when the company cut 10,000 posts, one of the sources said.

Representatives from the Airbus unions and the company met yesterday and will meet again today after holding their own discussions on Monday.

An Airbus spokesman declined to comment on the agenda of internal meetings. — Bloomberg