European aircraft manufacturer Airbus (AIR.PA) made a loss of €481m (£420m, $522m) in the first quarter of this year as the coronavirus pandemic devastated the aviation industry.
“We are now in the midst of the gravest crisis the aerospace industry has ever known,” Airbus chief executive Guillaume Faury said on Wednesday.
First-quarter adjusted earnings before interest and tax fell by nearly 50% in the quarter, to €281m.
On Friday last week, Faury sent a memo to the company’s 135,000 employees warning that the plane-maker was “burning cash at an unprecedented speed, which may threaten the very existence of our company.”
In the memo, seen by a number of media outlets including Reuters and Bloomberg, Faury wrote “we must now act urgently to reduce our cash-out, restore our financial balance and, ultimately, to regain control of our destiny.”
Faury said today that the Toulouse-headquartered company would put more French workers on leave and will furlough employees in Germany, noting that “the resizing of the company will be made not only looking at the minus 35% adaptation we’ve done recently but also the likely scenario moving forward.”
Faury listed a number of measures the company is taking to try and battle the crisis, including “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.”
Airlines across Europe are fighting for their survival as the coronavirus crisis has grounded the vast majority of flights, and there is no clarity on how long the situation will last. The travel industry is expected to suffer the effects of the crisis at least into next year.
In the UK, British Airways owner IAG ( (IAG.L) said this week that it will be “several years” until passenger demand is back at 2019 levels, and it plans to make up to 12,000 staff redundant.
In Germany, the Lufthansa Group (LHA.DE) is in discussions with the government about the terms of a potential €9bn rescue package. CEO Carsten Spohr is also talking about state aid with the governments of Belgium, Switzerland, and Austria, as the Lufthansa Group also owns Brussels Air, Swiss Air, and Austrian Airlines.