Airbus boss warns company is 'bleeding cash'

[Ddraig Goch]

Airbus announces that it is short of cash and there are tough times ahead. From BBC:

The chief executive of Airbus has issued a stark assessment of the impact of the coronavirus pandemic on the plane maker.

In a letter to workers, seen by news outlets, Guillaume Faury is said to have warned the company was "bleeding cash at an unprecedented speed".

Mr Faury also told Airbus' 135,000 staff to brace for potentially deep job cuts and warned that its survival was at stake without immediate action, according to the Reuters news agency.

https://www.bbc.co.uk/news/business-52436741

[dctPub]

Cmon boys and girls let's hope they cut the ATTOL project

[cashash]

Ironically, given the 737 Max debacle, it is Airbus who are in greater financial distress than Boeing due to the Covid19 shutdown of aviation. Airbus are reliant on the Commercial sector for 66% of their revenue whilst Boeing with its larger defence capability only gets 49% of its revenue from the airlines.

If people like Stelios get their way an we see a wave of order cancellations in the near future then both companies are going to need significant taxpayer assistance.

[inOban]

I thought that they had a pipeline of orders for several years. Or are they, like the engine makers, not paid upfront but by the hour in use?

[tdracer]

Originally Posted by inOban

I thought that they had a pipeline of orders for several years. Or are they, like the engine makers, not paid upfront but by the hour in use?

Airlines that go out of business don't take delivery, and those who are burning through all their available cash don't want to take delivery of new aircraft if they can avoid it. There are going to be massive deferrals of new deliveries over the next 12 months (at least, possibly much longer) for both Boeing and Airbus - and neither company can afford to keep building 60+ aircraft per month when they can only deliver a small fraction of that.
I've seen estimates of 30,000 near term job cuts at Boeing in the Puget Sound area (with at least that many more among suppliers). I suspect Airbus will be similar.

[wiggy]

Originally Posted by tdracer

I've seen estimates of 30,000 near term job cuts at Boeing in the Puget Sound area (with at least that many more among suppliers). I suspect Airbus will be similar.

Yes it is, we're not far from Toulouse and a family member who is enjoying lockdown in the city itself and has close connections with a few at Airbus tells me he hearing via social media etc it's already starting to sound pretty ugly. Some of the local "Facs"/Institutions are very much feeders of graduates to Airbus - many graduating students who were expecting to get placements there this summer have already been told don't turn up. In addition a couple of friends of our family working for an local Airbus sub-sub-contractor were both given two days notice to bring their company laptops in and hand their IDs in earlier this week ( French labour law doesn't always provide the protection some seem to think it does).

Given how big a player Airbus and aviation is locally the knock on effect on our local economy is going to be significant.

ATB...bet you are glad you are retired and out of this.....

[tdracer]

Originally Posted by wiggy

ATB...bet you are glad you are retired and out of this.....

Actually I decided that I was really glad last year - during the MAX fiasco. Morale in engineering - even among those uninvolved in the MAX - was really bad and I was glad to be far removed from it (still trying to figure where all those FAA types that allowed you to do whatever you wanted were before I retired, since I never encountered one)
I've been communicating with some of my friends that are still there and have been offered voluntary layoffs (that's the deal I took - if you take the voluntary layoff you get a severance payment of one week pay per year of service up to 26 weeks - plus any accumulated vacation - plus they extend your benefits (e.g. insurance) for 3 months - so you just take the layoff payout and then retire). I've been encouraging them to take it and get out while the going is good.

[JRK]

And with very cheap oil using older, paid-off and well depreciated (on the books) machines vs new shiny jets on high lease pmts will make more sense in the near to medium term...