Airbus CEO Guillaume Faury has said the company is “in the midst of the gravest crisis the aerospace industry has ever known” after it posted a €481 million ($522m) loss in its first quarter results.
Faury this week warned Airbus employees of deep job cuts and said in an internal memo that the company is “bleeding cash fast”.
Airbus’ results for the three months to the end of March, published this morning, show group revenues fell 15% to €10.6 billion. Revenues in its airline business dropped 22% to €7.6 billion.
The manufacturer is grappling with the Covid-19 crisis, which has obliterated demand for international air travel following government restrictions on travel.
Increasing numbers of airline customers are requesting deferrals on deliveries and some have cancelled orders, predicting that demand for air travel will not pick up again to pre-pandemic levels for several years.
“We are now in the midst of the gravest crisis the aerospace industry has ever known,” Faury said in a statement.
The manufacturer recently revealed that it is planning to cut production by around a third, representing a reversal in strategy to 2019 when it was struggling to keep up with demand for its A320 aircraft.
Airbus received net total of 290 commercial aircraft orders in Q1 2020, compared to a net of -58 in 2019. It still managed to deliver 122 planes, mainly A320s, in the quarter, despite the coronavirus situation.
Faury added: “We’re implementing a number of measures to ensure the future of Airbus. We kicked off early by bolstering available liquidity to support financial flexibility.
“We’re adapting commercial aircraft production rates in line with customer demand and concentrating on cash containment and our longer-term cost structure to ensure we can return to normal operations once the situation improves.”
The company recently secured a credit facility amounting to €15 billion.
It is reducing expected capital expenditure this year by around €700 million to around € 1.9 billion and is suspending activities which are “not critical” to business continuity and to meeting customer and compliance commitments.