PARIS • Airbus SE CEO Guillaume Faury (picture) stepped up his warning on forced job cuts at the European planemaker as a sharper than expected decline in travel leads carriers to push back deliveries of new jets.
“The situation has worsened” coming out of the summer high season, he said yesterday in an interview on France’s RTL radio. “Airlines are in a more difficult situation after the holidays than what we were hoping.”
The industrial giant, whose cost-cutting plans call for the elimination of 15,000 jobs, will have to “adapt to the new environment”, he added, in particular on the employment front. The shares dropped as much as 2.7%.
“It will be very difficult to stick with voluntary departures,” Faury said, reiterating that the company “is potentially at risk” if it doesn’t take the right steps. He pointed to a 40% decline in the jet maker’s production and deliveries.
The European rival to Boeing Co, grappling with an unprecedented collapse in air travel because of the coronavirus, is already trying to entice workers to leave to limit tougher measures. France is braced to absorb about one-third of the planned cuts and Faury yesterday said talks with unions are aimed at using tools like part-time employment and state support of research and development to avoid forcing people to leave the company.
“Airlines aren’t cancelling their orders, but they aren’t honouring deliveries,” Faury said. “The delays on deliveries are very strong” because carriers don’t have the means to take ownership of the planes after passengers and revenue dried up.
Airbus’ 40% reduction in output is holding, but “I’m extremely cautious about how the crisis is developing and what is coming next with Covid”, he said.
Airbus shares fell 1.3% at 9:25am in Paris yesterday, bringing the year-to-date decline to 52%.
The grim outlook for the industry was driven home on Monday when Deutsche Lufthansa AG accelerated fleet and staff cuts amid mounting concern about the severity of the downturn.
Europe’s biggest airline will pull 150 jets by mid-decade, 50 more than in its previous plan, leading to more job cuts than the 22,000 already due to go. — Bloomberg