Airbus SE, now the world’s largest planemaker, could take more strict measures to cut more jobs because of a continued fall in demand for travel fuelled by the coronavirus pandemic, CEO Guillaume Faury told French radio station RTL Tuesday morning.
KEY FACTS
The European planemaker is already committing to cutting 15,000 jobs as air travel and orders from airlines have been ravaged by the coronavirus pandemic, with a number of layoffs made through a voluntary redundancy scheme.
But on Tuesday, Faury warned that voluntary redundancies may not be enough to reach that goal.
He added that he could not guarantee that compulsory redundancies would not happen in a bid to cut costs.
The CEO said that while airlines were not cancelling orders, they were delaying them as demand for air travel stays at a fraction of activity before the coronavirus and with many travel bans still in place, and lockdown restrictions returning to regions facing a second wave.
Loading...
Faury said that had left airlines “in a more difficult situation after the holidays than what we were hoping.”
CRUCIAL QUOTE
Faury told RTL on Tuesday: “The situation is so serious, and we are faced with so much uncertainty, that I think no one can guarantee there won’t be compulsory redundancies if we’re to adapt to the situation, especially if it evolves further.
“On the other hand, what I say clearly is that we have a lot of work to do, we will do everything we can to avoid arriving at that point.”
BIG NUMBER
40%. That’s how much Airbus is dropping its production by for the next two years, to offset the effects of the pandemic.
KEY BACKGROUND
Air travel has been one of the industries most severely hit by the coronavirus pandemic, with a number of global firms slashing orders from the world’s biggest planemakers including Airbus, and Boeing. In June, Airbus committed to cutting 15,000 jobs—or 15% of its global workforce—citing the coronavirus pandemic as the “gravest crisis” in the firm’s history. The extent of the impact on the aerospace giant was made clear in July, when it posted a nearly $2 billion loss in the first half of 2020, while new orders in the second quarter plummeted to just eight, compared with nearly 300 in the first three months of the year. While governments have doled out some $161 billion in aid to airlines around the world, according to IATA, the next challenge will be keeping struggling airlines afloat during the winter months, which will likely be compounded by a second wave of the coronavirus and a likely repeat of some stringent lockdown measures.
FURTHER READING
‘Gravest crisis’ as Airbus plans to cut 15,000 jobs (The Guardian)
by Isabel Togoh,Forbes Staff
Loading...