Airbus Q1 profit plunges as virus crisis starts to bite
PARIS: Airbus yesterday posted a 49 percent slump in first-quarter core profit and called for an industry-wide campaign to restore confidence in flying after the coronavirus pandemic triggered the “gravest crisis the aerospace industry has ever known”. Europe’s largest aerospace group also highlighted plans to save cash after gushing 8 billion euros in the first quarter, including a record 3.6-billion-euro fine to settle corruption investigations in Britain, France and the United States.
“All nature of costs are now being reviewed,” CEO Guillaume Faury told analysts. Airbus has been unable to deliver more than a handful of aircraft since Europe-wide lockdowns began in mid-March and Faury said he expected similar difficulties in the second quarter before a clearer picture emerges in around June.
Chief Financial Officer Dominik Asam told a telephone news conference he expected some recovery in the third quarter before returning “basically to a neutral situation where we don’t use cash anymore” in the fourth.
Airbus expanded furlough schemes on Tuesday by sending home 3,200 workers in Britain after putting 3,000 workers on government-backed partial unemployment schemes in France, and Faury said thousands of German staff could also be affected. He did not say whether Airbus would carry out forced redundancies but told staff last week to prepare for “more far-reaching measures” to balance the group’s costs to the reduced outlook for aviation in coming years. “We are doing everything we can to be in the best shape for competing again later,” Faury said yesterday.
Airbus said first-quarter adjusted operating profit fell 49 percent to 281 million euros ($304.7 million) as revenue dropped 15 percent to 10.631 billion euros, mainly due to clouds that were already gathering over jetliner demand before the coronavirus outbreak.
Planemakers, airlines and suppliers have been left reeling by the pandemic, which has crippled passenger travel and catapulted major economies into recession. Airbus suspended its outlook and dividend and negotiated new credit lines last month. It said yesterday it does not immediately see a need for further government support. Airbus this month cut jet production by between one third and 42 percent depending on the model, compared with previously announced rates. — Reuters