AviationEuropean plane maker prepares to make job cuts this week after slashing production by over one-third

Job cuts loom at Airbus and Boeing

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Airbus has slashed production goals by more than a third, in view of retreating demand.
Airbus has slashed production goals by more than a third, in view of retreating demand. Photo Credit: Getty Images

EDINBURGH – Permanent job cuts are looming at Airbus and Boeing as plane makers grapple with the severe collapse in demand for new planes.

US rival Boeing Co said last month that it will axe some 16,000 jobs – or about 10% of its workforce – to conserve cash and adapt to a shrunken commercial aircraft market. It has raised US$25 billion in a bond offering to boost liquidity to prepare for a years-long industry recovery.

The European plane maker Airbus is preparing to make job cuts this week after warning unions it needs to downsize production amid a collapse in demand, Bloomberg reported.

Airbus has slashed production goals by more than a third, in view of retreating demand.

CEO Guillaume Faury told Airbus bosses to “face reality” in a briefing on the crisis, which has idled an estimated 14,000 jetliners or two-thirds of the global fleet and left manufacturers and airlines battling to save cash.

Airbus has already taken action to cut costs, with Mr Faury warning employees late last month that it's "bleeding cash" at such a rate that it could threaten its survival.

US rival Boeing Co said last month that it will axe some 16,000 jobs – or about 10% of its workforce – to conserve cash and adapt to a shrunken commercial aircraft market. It has raised US$25 billion in a bond offering to boost liquidity to prepare for a years-long industry recovery.

Falling orders
As of April, Airbus’ orders for the year were 365 aircraft. After about one-sixth of the orders were cancelled, the plane maker’s order tally stands at 299 airplanes. It has delivered 136 aircraft this year, a drop from 232 compared to the same time in 2019.

Boeing in April recorded zero orders for the second time this year.  Customers have cancelled another 108 orders for its grounded 737 MAX plane, compounding its worst start to a year since 1962.

This was in addition to the 150 737 MAX orders scrapped in March by customers such as Irish leasing company Avolon and Brazil’s GOL.

The company said last Tuesday that it delivered just six planes in April, bringing the total to 56 for the first four months of 2020, down 67% from a year earlier, as it battles the biggest crisis in its history.

Airlines pull out orders
Qantas has postponed aircraft deliveries from both Airbus and Boeing as it reassesses its capacity needs due to the coronavirus downturn.

The Australian carrier told the plane makers it will pause deliveries until it has more certainty over air travel demand in the coming months.

It is deferring three Boeing 787s, which were due by the end of 2020, and 18 Airbus A321neos for its budget arm Jetstar Airways

Qantas has already put on hold an order for up to a dozen Airbus A350 jets for its much-anticipated ultra-long-haul flights to London and New York.

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