Coronavirus crisis causes heavy losses for Airbus and Boeing

Text by: Aabla Jounaïdi Follow

The financial and industrial crisis caused by the coronavirus pandemic is starting to be seen in the results of companies in the aeronautical sector. Suddenly, competitors Airbus and Boeing revealed very heavy losses in the first quarter, to the point that jobs are threatened.

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The American manufacturer Boeing confirmed on Wednesday that 10% of its workforce worldwide will be laid off. These voluntary departures and dry layoffs will hit the civil aviation division of the giant of Seattle. Chief Executive Officer Dave Calhoun informed the employees by internal mail on the sidelines of the publication of the first quarter results. The latter bear the stigma of the crisis initiated in March with the confinement of a large part of the inhabitants of the planet. The automaker posted a net loss of $ 641 million. At the same time, its turnover plunged 26.2% over one year.

Deliveries of civil aircraft, for their part, fell by a third. Boeing has also announced that it will reduce the production rate of its aircraft. In particular that of the long-haul 787 and the 777. Deprived of sales of its 737 Max for a year, Boeing has decided to cut short to save money. By doing this, he is no longer eligible for the assistance plan of the American administration which conditions any support for the maintenance of jobs.

Airbus in the red too

This may not console the American manufacturer, but the European competitor Airbus is also in the red after the first quarter. CEO Guillaume Faury announced a 15% decline in turnover and a net loss of 481 million euros. As for cash, the group "is  bleeding money at unprecedented speed  ," he says. To maintain itself, it had signed in March a credit line of 15 billion euros and reduced production by about a third. But the customers, namely the airlines, are struggling.

Several of them are announcing massive layoff plans. British Airways plans to cut 12,000 jobs out of the 42,000 it has around the world. At the same time, the Scandinavian airline SAS and the Icelandic Icelandair are also planning thousands of layoffs. British unions are denouncing the position of British Airlines which they believe could have negotiated public support to avoid arriving at these massive layoffs. In an open letter, the main European airlines took advantage of a meeting of EU transport ministers on Wednesday to request urgent support from the states, many of which are still evaluating their intervention.

On the French side, after helping Air France, the government also does not rule out supporting Airbus. The French Minister for the Economy said it: the State is ready to massively help the aircraft manufacturer. Bruno Le Maire argues that the aid promised to Air France, that is to say 7 billion euros, will in turn be able to support orders for airplanes to Airbus.

Who says support for Airbus, also says support for the whole galaxy of subcontractors who depend on this big customer. In the United Kingdom, in Germany, and in the Occitanie region in France, tens of thousands of jobs are at stake. However, Airbus reserves the right to take more drastic measures concerning employment next June, at the end of the second quarter. A quarter that could leave even more damage in finances.

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