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flee
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Re: Airbus CEO: "“We’re bleeding cash at an unprecedented speed, which may threaten the very existence of our company,”

Mon Apr 27, 2020 4:00 am

Everyone knows that Airbus (and Boeing) won't be able to survive a total reset of the industry without taking some drastic measures. Virtually all the world's airlines have no capability to accept deliveries of new aircraft from the OEMs as they have no income. The leasing companies will find the going tough as many airlines will be in arrears in payment. Business models need to be revised before the industry can move again. How long will it take before we see some clarity?
 
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flee
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Re: Airbus CEO: "“We’re bleeding cash at an unprecedented speed, which may threaten the very existence of our company,”

Mon Apr 27, 2020 4:11 am

T4thH wrote:
wingman wrote:
Some of us said this in earlier threads..Boeing had already shut down the MAX lines and bled out. Airbus now has to do the same. Incredibly, the benefit to Boeing may turn out to be the year-long period they had the “benefit” of where Airbus will be forced to shut down multiple lines in 4-5 countries with brutal expediency. It’s ugly as sin for both companies.

I think, Airbus has even a benefit. They do not have only "one line", they have several. They can close or hibernate one or several lines and let the others work at 100%.
I expect, first country, taking up planes again, will be China. The FAL in Tianjing will not be closed,. I also do not expect, that the Mobile FALs for the A320 and A220 will be closed, US Airlines will take up jets earlier again than other countries. The A320 FALs in Toulouse are outdated and shall be exchanged by new FAL in the A380 FAL building. I fear one of them will be closed and never reopened again. A restart will be only in the new build up FAL in the A380 FAL and than it will be also able to produce A321. The old FALs can only build jets in the size of A319 and A320.
Minimum one A320 production line in Hamburg FAL building will be hibernated. The A320 FAL in Hamburg with the production lines has a big benefit, the A321 Neo production lines are in Hamburg.

Boeing has suffered more than 1 year of no income from their cash cow, the Max. Now they have a 400+ frame inventory and they should worry about whether all of this can be delivered before even thinking of restarting production (at a low rate).

Yes, Airbus has far flung FALs in Tianjin and Mobile and if the European plants stop production, their supplies of the various assemblies will also stop. Airbus has a complex supply chain worldwide and it will be a big headache for them. Their CEO is merely warning employees that more pay cuts and job losses will be coming. It will be a shame to lose skilled workers in this way but with demand unlikely to recover for a few years, cutbacks are inevitable.
 
jeffrey0032j
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Re: Airbus CEO: "“We’re bleeding cash at an unprecedented speed, which may threaten the very existence of our company,”

Mon Apr 27, 2020 4:20 am

flee wrote:
T4thH wrote:
wingman wrote:
Some of us said this in earlier threads..Boeing had already shut down the MAX lines and bled out. Airbus now has to do the same. Incredibly, the benefit to Boeing may turn out to be the year-long period they had the “benefit” of where Airbus will be forced to shut down multiple lines in 4-5 countries with brutal expediency. It’s ugly as sin for both companies.

I think, Airbus has even a benefit. They do not have only "one line", they have several. They can close or hibernate one or several lines and let the others work at 100%.
I expect, first country, taking up planes again, will be China. The FAL in Tianjing will not be closed,. I also do not expect, that the Mobile FALs for the A320 and A220 will be closed, US Airlines will take up jets earlier again than other countries. The A320 FALs in Toulouse are outdated and shall be exchanged by new FAL in the A380 FAL building. I fear one of them will be closed and never reopened again. A restart will be only in the new build up FAL in the A380 FAL and than it will be also able to produce A321. The old FALs can only build jets in the size of A319 and A320.
Minimum one A320 production line in Hamburg FAL building will be hibernated. The A320 FAL in Hamburg with the production lines has a big benefit, the A321 Neo production lines are in Hamburg.

Boeing has suffered more than 1 year of no income from their cash cow, the Max. Now they have a 400+ frame inventory and they should worry about whether all of this can be delivered before even thinking of restarting production (at a low rate).

Yes, Airbus has far flung FALs in Tianjin and Mobile and if the European plants stop production, their supplies of the various assemblies will also stop. Airbus has a complex supply chain worldwide and it will be a big headache for them. Their CEO is merely warning employees that more pay cuts and job losses will be coming. It will be a shame to lose skilled workers in this way but with demand unlikely to recover for a few years, cutbacks are inevitable.

Airbus will face a 400 plane inventory in a few months time if nobody takes delivery of those planes, given current economic conditions. The A320 production rate was already higher than the 737 and they already have A320s stored around the plants.
 
Varsity1
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Re: Airbus CEO: "“We’re bleeding cash at an unprecedented speed, which may threaten the very existence of our company,”

Mon Apr 27, 2020 4:48 am

Revelation wrote:
Reuters has an update which includes more details of Faury's letter:

To stem the outflow of cash, Airbus this month said it would slash benchmark narrow-body jet production by a third to 40 jets a month. It also issued reduced targets for larger jets implying cuts up to 42% compared with previously published rates.

In other words, in just a couple of weeks we have lost roughly one-third of our business,” Faury wrote in the letter, which was earlier reported by Bloomberg News. “And, frankly, that’s not even the worst-case scenario we could face”.

He said the new production plan would remain in place for as long as it took to make a more thorough assessment of demand, adding this would probably be between two and three months.

Ref: https://www.reuters.com/article/health- ... SL5N2CE0MT

So narrow bodies are cut 33% and wide bodies cut 42% relative to pre-covid targets, and plans are under assessment with an update due in 2-3 months.

atimp wrote:
EU will bail them out.

Yes, they are a center piece of EU industrial policy and "too big to fail" so when push comes to shove they will get government support.

They will have the same issue Boeing is facing: how do you minimize the political strings that will be attached?



They are trying to slow the supply chain down. You can't just throw the brakes on 70-80% as most suppliers will go broke.

I suspect they will anyways as Boeing and Airbus use the same contractors. Companies like Spirit Aerosystems and Leonardo are going to be deep in red ink. They will probably need some cooperative assistance from Airbus and Boeing (advance payments) or a bailout.
"PPRuNe will no longer allow discussions regarding Etihad Airlines, its employees, executives, agents, or other representatives. Such threads will be deleted." - ME3 thug airlines suing anyone who brings negative information public..
 
olle
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Re: Airbus CEO: "“We’re bleeding cash at an unprecedented speed, which may threaten the very existence of our company,”

Mon Apr 27, 2020 5:59 am

blueflyer wrote:
Let's not fool ourselves. While it may have been an internal communication, the intended audience is also the governments where Airbus has significant operations to prepare them for massive job cuts and possibly shutting down factories. Mobile is first in line as it is the easiest plant to have massive job cuts both from social and political perspectives, up to shutting down all assembly save the A220.

Airbus employees and vendors in the UK are next. Compounding the ever-increasing likelihood of a no-deal Brexit to the virus' economic damages, there is no political risk whatsoever in cutting as much from the UK as possible. In a twist of fate, wing manufacturing may be safe for the mid-term, as there is probably zero appetite right now within Airbus for the significant capital expenditure required to relocate the operations elsewhere. The one risk I see is whether the French government wants to be creative and offers Airbus subsidized loans (*) and loan guarantees to cover the cost of moving wing manufacturing to Toulouse in order to keeps jobs while Airbus shuts down A320 and A380 production in France.

(*) if you think any government, especially the French government, is concerned about issuing financial instruments within the rules set by the EU, WTO, Basel Accords, etc. I have an ocean-view villa in the middle of the Sahara desert for sale you may be interested in.

VS11 wrote:
The age of frequency is over for the next couple of years. Some trunk routes can be running on a once-daily A380.

You may be right that the existing A380 fleet may be used to consolidate multiple frequencies into far fewer flights (e.g. two or three BA A380s to JFK), but no one is going to be buying new aircraft for a two or three-year horizon. Two already-owned 777s, or A330s, or 767s is still a far cheaper option than a brand-new A380.


Very likely outcome.

UK government does not seems to get any friends in Spain Germany and France. Big change on the way.
 
marcelh
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Re: Airbus CEO: "“We’re bleeding cash at an unprecedented speed, which may threaten the very existence of our company,”

Mon Apr 27, 2020 6:11 am

Revelation wrote:
Dmoney wrote:
If Airbus need to fire 30% of their staff permanently and close say the Spanish factories that kind of decision is only possible if you present an existential situation which requires otherwise unthinkable moves.

That's an interesting point. Maybe we shall see Airbus make some moves that it could not make under normal circumstances.


With an UK government steering towards a hard Brexit and Airbus getting support from the continent and EU, I can see some wings will be built on this side of the North Sea in the future....
 
FluidFlow
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 6:35 am

Between the lines I guess Airbus is looking for concessions in the department of worker rights. A cut of 40% in production will also lead to a massive cut in jobs. Now as we are in Europe this will not go down easy and well, especially in France. As I think Airbus will be fine, one way or another, they are laying the groundwork now to get "state aid" for the workers. All Airbus needs right now is a guarantee from the countries that they will take over the costs of firing people. So that laying off the workers will stop a bleed in cash instead of keeping it going for at least three months (minimum contract termination time?).
 
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Francoflier
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 8:26 am

Ah yes. This is the time when large companies and corporations break out the tissues and start coming up with the sob stories of how they're on the verge of collapse after a 10 year run of record profits just to see what juicy 'rescue package' they can get from their government.

2008 all over again.
I'll do my own airline. With Blackjack. And hookers. In fact, forget the airline.
 
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seahawk
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 8:35 am

In the end nobody forced Airbus to aim for nearly 70 frames a months, they could have stayed at 30 or 40. They decided to grow, they must accept the risks. Thousands of small business will go bust, but big co-operations are too big to fail. It is just sad.
 
Flying-Tiger
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 8:46 am

seahawk wrote:
In the end nobody forced Airbus to aim for nearly 70 frames a months, they could have stayed at 30 or 40. They decided to grow, they must accept the risks. Thousands of small business will go bust, but big co-operations are too big to fail. It is just sad.


Just ignoring that mentioned big-cooperations have a multitude of small business as supplier, many of these doing their majority of business with said large co-operations. It is usually easier to make sure the large co-operation continues to exist and distributes money for products and services down the supply chain than trying to save all small businesses. You avoid the ripple-down effects.

Doesn´t matter if this is Airbus, Boeing, Lufthansa, Delta, IAG, Qantas, AF/KL or anyone else. In my optinion these companies are in today´s environment too large to fail and would create many more problems that supproting them. In an business environment, say mid-last year, I´m with you that competition would have been able to pick up the slack one way or the other. But not these days.

That said: it´s time to consider how large we want to keep enterprises growing. Not necessarily in manufacturing and services, but especially finance (banking, insurance etc). These sectors are de-coupled from real life economy completely these days, for no benefit of society.

On Add-On: client´s forced Airbus to increase their production to stay in line with demand.
Flown: A319/320/321,A332/3,A343/346, A359, A380,AT4,AT7,B712, B732/3/4/5/7/8/9,B742/4,B752/3, B762/763,B772/77W,CR2/7/9/K,ER3/4,E70/75/90/95, F50/70/100,M11,L15,SF3,S20, AR8/1, 142/143,... 330.860 miles and counting.
 
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flee
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 8:47 am

seahawk wrote:
In the end nobody forced Airbus to aim for nearly 70 frames a months, they could have stayed at 30 or 40. They decided to grow, they must accept the risks. Thousands of small business will go bust, but big co-operations are too big to fail. It is just sad.

If Boeing and Airbus are allowed to fail, even more small businesses will fail because there are many small businesses that are involved in supplying these large corporations.

Airbus' production rate is dictated by demand. If it is not able to deliver planes in a timely manner, customers will buy from other suppliers. Looking from a wider perspective, if the supply of aircraft does not meet demand, the growth of the airline/travel industry will also be stunted.
Last edited by flee on Mon Apr 27, 2020 8:51 am, edited 1 time in total.
 
mxaxai
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 8:48 am

Francoflier wrote:
Ah yes. This is the time when large companies and corporations break out the tissues and start coming up with the sob stories of how they're on the verge of collapse after a 10 year run of record profits just to see what juicy 'rescue package' they can get from their government.

2008 all over again.

However, large OEM's are a large source of income - if not the sole source - for many suppliers. They also have enough debt that their bankruptcy could put some banks into serious trouble. It does make sense to support large corporations with tailor-made aid packages.

That said, most countries are setting up financial aid for small businesses too; or would you expect restaurants, bars, hotels, barbers, taxi drivers... to save their "record profits" for such events (or go bankrupt within a few weeks)?
 
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seahawk
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 9:01 am

flee wrote:
seahawk wrote:
In the end nobody forced Airbus to aim for nearly 70 frames a months, they could have stayed at 30 or 40. They decided to grow, they must accept the risks. Thousands of small business will go bust, but big co-operations are too big to fail. It is just sad.

If Boeing and Airbus are allowed to fail, even more small businesses will fail because there are many small businesses that are involved in supplying these large corporations.

Airbus' production rate is dictated by demand. If it is not able to deliver planes in a timely manner, customers will buy from other suppliers. Looking from a wider perspective, if the supply of aircraft does not meet demand, the growth of the airline/travel industry will also be stunted.


Or this unfulfilled demand would open a chance for a competitor to enter the market. And the question is if small business will profit from the money. If there is a regulation that Airbus needs to tickle down the money to the suppliers, I would agree on a bailout, but if it goes the usual way I am all against it. As Airbus would clean shop, even pay compensations to the suppliers from that money and still create a lot of trouble for the suppliers and small business attached, which will probably get much less aid, if any. In the end Airbus and the whole supply chain will shrink, the government money won´t change that.
 
Boof02671
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Re: Airbus CEO: "“We’re bleeding cash at an unprecedented speed, which may threaten the very existence of our company,”

Mon Apr 27, 2020 9:21 am

Revelation wrote:
smartplane wrote:
Can probably count on the fingers of one hand, the number of airlines in the Western World, that haven't created a creditors committee involving their banks, lessors and major creditors, many meeting daily (virtual). Ditto for lessors.

Boeing 787 and all Airbus predicted production forecasts are fantasy unless make work job creation schemes. There are no customers. There is no finance. There are no passengers.

At this stage, only hard and very hard landings, with many casualties. Government support buys time to end 3Q20.

I'm having a hard time picturing why a given airline would want all its different creditors all on one committee, but I don't know how that kind of stuff works in general. Who would chair the committee (CFO?) and what is its goals?

smartplane wrote:
Would our next Churchill please stand tall.

Lord I wish we had one waiting in the wings, but have no evidence of such.

No such thing as a creditors committee outside of bankruptcy. Airlines don’t set up creditors committees the court does once chapter 11 is filed. Now they will have talks with companies to try and restructure debt, but all financial data is private and airlines don’t share the data with other debt holders.
 
FluidFlow
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 9:36 am

seahawk wrote:
flee wrote:
seahawk wrote:
In the end nobody forced Airbus to aim for nearly 70 frames a months, they could have stayed at 30 or 40. They decided to grow, they must accept the risks. Thousands of small business will go bust, but big co-operations are too big to fail. It is just sad.

If Boeing and Airbus are allowed to fail, even more small businesses will fail because there are many small businesses that are involved in supplying these large corporations.

Airbus' production rate is dictated by demand. If it is not able to deliver planes in a timely manner, customers will buy from other suppliers. Looking from a wider perspective, if the supply of aircraft does not meet demand, the growth of the airline/travel industry will also be stunted.


Or this unfulfilled demand would open a chance for a competitor to enter the market. And the question is if small business will profit from the money. If there is a regulation that Airbus needs to tickle down the money to the suppliers, I would agree on a bailout, but if it goes the usual way I am all against it. As Airbus would clean shop, even pay compensations to the suppliers from that money and still create a lot of trouble for the suppliers and small business attached, which will probably get much less aid, if any. In the end Airbus and the whole supply chain will shrink, the government money won´t change that.


Just don't forget, the governments (DE, F and E) already own around 25% of Airbus. It is in their interest to trickle the money down as far as possible, so a possible bail out will come with strings attached and is way easier to enforce than with Boeing for example, as the governments do hold a stake and influence in Airbus.
 
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LAX772LR
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Re: Airbus CEO: "“We’re bleeding cash at an unprecedented speed, which may threaten the very existence of our company,”

Mon Apr 27, 2020 9:53 am

VS11 wrote:
strfyr51 wrote:
VS11 wrote:
The age of frequency is over for the next couple of years. Some trunk routes can be running on a once-daily A380.

you can't be serious! An A380 trunk route? From where to where?? And? who is goin to FLY said Route??

Yes. NYC-London/Paris/Frankfurt.

Ah yes, that's precisely the reason why AF and LH are shedding their A380s as soon as they can; why VS forsook their longstanding A380 orders, and why BA has never once scheduled their A380s into NYC.

Guess none of them got your memo. :lol:
I myself, suspect a more prosaic motive... ~Thranduil
 
ixam500
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 10:28 am

IMO, they will cut jobs first in the non-core production countries, such as the UK and US and might get a Bailout through a simple capital increase, with shares isued to Germany, France and Spain.

As France and Germany own 11% each and Spain owns 4% of Airbus, it is likely that they would want to increase their control of the company when providing cash.
If there are cuts in the "shareholding" countries, these will probably be proportional to each other; Airbus won't close all spanish factories while not cutting any jobs in France.
 
leghorn
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 10:46 am

When their Management team start reassuring the Market that they are in the peak of health like some notable Airlines which have entered bankruptcy and administration then and only then will I get worried.
 
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Francoflier
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 10:50 am

mxaxai wrote:
Francoflier wrote:
Ah yes. This is the time when large companies and corporations break out the tissues and start coming up with the sob stories of how they're on the verge of collapse after a 10 year run of record profits just to see what juicy 'rescue package' they can get from their government.

2008 all over again.

However, large OEM's are a large source of income - if not the sole source - for many suppliers. They also have enough debt that their bankruptcy could put some banks into serious trouble. It does make sense to support large corporations with tailor-made aid packages.

That said, most countries are setting up financial aid for small businesses too; or would you expect restaurants, bars, hotels, barbers, taxi drivers... to save their "record profits" for such events (or go bankrupt within a few weeks)?


I don't disagree. It's not just the massive amount of debt they hold which could severely disrupt the financial system if they defaulted, it's also the dozens or hundreds of thousands of employees which would end up on the lap of their respective governments, which the latter would very much try to avoid...

All in all, we're back in the old 'too big to fail' debate. Governments know that they have to be bailed out, or at least helped weather the crises, to avoid even nastier consequences, and these very corporations are very aware of this and don't hesitate to extend a begging hand while subtly threatening massive layoffs. Wash, rinse repeat.
To be honest, so long as governments set strict rules for eventual repayment, and assuming that the reason these companies are in trouble is external and not due to their own mismanagement or obsolescence of their business model (giving enough assurances that it will thrive again after the crisis), then I suppose it's the least worst option and I'd rather see that than thousands losing their jobs for no valid reason.

The whole dance is just a bit sickening to me, but I suppose that's just the way it works now, especially since many industries, especially aviation, have been the victims of governments' unpreparedness in this case.
I'll do my own airline. With Blackjack. And hookers. In fact, forget the airline.
 
TaromA380
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 12:04 pm

Some are pointing out the advantage of military/defense programs for keeping a company afloat. I wonder for how long these programs will run as scheduled and make purchases as planned before Covid-19.

In my opinion, with the abyssal deficit all governments are facing, military fundings/spendings will be abruptly halted, maybe even more abruptly than any other domain.
 
leghorn
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 12:22 pm

TaromA380 wrote:
Some are pointing out the advantage of military/defense programs for keeping a company afloat. I wonder for how long these programs will run as scheduled and make purchases as planned before Covid-19.

If the Governments shrink spending on defence they will spend it on supression of internal strife and defence companies will "pivot".
News today said Defence spening worldwide last year was higher than ever before. I didn't pay attention as I was preparing for work and was only giving it passing attention.
 
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par13del
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 12:25 pm

TaromA380 wrote:
In my opinion, with the abyssal deficit all governments are facing, military fundings/spendings will be abruptly halted, maybe even more abruptly than any other domain.

If you rely on others for your protection by paying a "fee" sure, but if you have your own industry, you have the additional excuse of national security during a pandemic.
Also, if government is funding production and assistance to civilian production, all private business get involved, political and economic pundits, poor management, etc etc etc.
Military contracts can be provided much easier with less scrutiny from every sector of the financial world, political is different but that is where we have "horse trading".
How many additional C-130's / A400M's are needed to bolster the delivery of essential supplies while the commercial belly cargo market is reduced for the next couple years?
 
brindabella
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Re: Airbus CEO: "“We’re bleeding cash at an unprecedented speed, which may threaten the very existence of our company,”

Mon Apr 27, 2020 12:35 pm

T4thH wrote:
wingman wrote:
Some of us said this in earlier threads..Boeing had already shut down the MAX lines and bled out. Airbus now has to do the same. Incredibly, the benefit to Boeing may turn out to be the year-long period they had the “benefit” of where Airbus will be forced to shut down multiple lines in 4-5 countries with brutal expediency. It’s ugly as sin for both companies.


I think, Airbus has even a benefit. They do not have only "one line", they have several. They can close or hibernate one or several lines and let the others work at 100%.
I expect, first country, taking up planes again, will be China. The FAL in Tianjing will not be closed,. I also do not expect, that the Mobile FALs for the A320 and A220 will be closed, US Airlines will take up jets earlier again than other countries. The A320 FALs in Toulouse are outdated and shall be exchanged by new FAL in the A380 FAL building. I fear one of them will be closed and never reopened again. A restart will be only in the new build up FAL in the A380 FAL and than it will be also able to produce A321. The old FALs can only build jets in the size of A319 and A320.
Minimum one A320 production line in Hamburg FAL building will be hibernated. The A320 FAL in Hamburg with the production lines has a big benefit, the A321 Neo production lines are in Hamburg.


I posed several weeks ago that both AB and BA would be baled-out.

So there is little of your post that I would find even vaguely likely.

However your point about China is a new idea (to me anyway).

The Chinese economy is clearly still in major distress and it is unlikely that the Chinese airlines want any more frames at all, for some time to come.

It is, however, Communist China, and it might well please the Government to order the airlines to take new A320neo family frames - but only those coming from Tianjin!

:D

cheers
Billy
 
brindabella
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Re: Airbus CEO: "“We’re bleeding cash at an unprecedented speed, which may threaten the very existence of our company,”

Mon Apr 27, 2020 12:53 pm

flee wrote:
Everyone knows that Airbus (and Boeing) won't be able to survive a total reset of the industry without taking some drastic measures. Virtually all the world's airlines have no capability to accept deliveries of new aircraft from the OEMs as they have no income. The leasing companies will find the going tough as many airlines will be in arrears in payment. Business models need to be revised before the industry can move again. How long will it take before we see some clarity?


My initial reaction was surprise that Faury had not cut deeper immediately.
"Excess" frames built now will likely sit-around for some time until the airlines finally recover enough to start expanding once again from their suddenly-reduced fleets (EG as already announced, DL will re-emerge as a substantially smaller airline).

OTOH, it may actually pencil-out to make more such frames now when the quality-control is excellent and production-costs are still very favourable, even at 1/3 reduction in overall rate.

cheers
Billy
 
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JetBuddy
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 1:22 pm

The US government won't let Boeing fall. Too much on the line in terms of jobs, taxes, and technology knowhow. Same thing with Airbus in Europe. The Germans and the French won't let Airbus go down. I'm quite certain of it.

We might end up with higher government stakes in both airlines and aircraft manufacturers. As long as it's a temporary solution and shares will be sold when the market improves, it might work. I don't believe in nationalization, it has proved to fail multiple times. But usually those were examples of already well run and profitable companies being taken over by the state, and then run into the ground. This is a very different scenario. It's about the survival of essential businesses. As long as shares will be sold when the market improves.
 
Flying-Tiger
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Re: Airbus CEO: "“We’re bleeding cash at an unprecedented speed, which may threaten the very existence of our company,”

Mon Apr 27, 2020 1:46 pm

brindabella wrote:
My initial reaction was surprise that Faury had not cut deeper immediately.


Simply put: it takes time. These cuts were the initial "easy" cuts and maybe possible within existing contracts. E.G "25% variation possible" or "usage of work hour accounts", "useage of holiday" etc.

Whatever comes now will need to be negotiated with the work force, clients, supplier and stakeholders.
Flown: A319/320/321,A332/3,A343/346, A359, A380,AT4,AT7,B712, B732/3/4/5/7/8/9,B742/4,B752/3, B762/763,B772/77W,CR2/7/9/K,ER3/4,E70/75/90/95, F50/70/100,M11,L15,SF3,S20, AR8/1, 142/143,... 330.860 miles and counting.
 
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 2:01 pm

ixam500 wrote:
IMO, they will cut jobs first in the non-core production countries, such as the UK and US and might get a Bailout through a simple capital increase, with shares isued to Germany, France and Spain.

As France and Germany own 11% each and Spain owns 4% of Airbus, it is likely that they would want to increase their control of the company when providing cash.
If there are cuts in the "shareholding" countries, these will probably be proportional to each other; Airbus won't close all spanish factories while not cutting any jobs in France.


Agreed. First reductions will be in the UK and US, IMO. This is going to far more complex than the A380 bailout days. Things will get very ugly geopolitically very quickly unless they are smart about spreading the pain. This will be a HUGE Test of EU Leadership. Hope things work out way down the road. It's bad enough with the duopoly the way it was prior to this crisis.
To know your Enemy, you must become your Enemy.” Sun Tzu
 
Elementalism
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 2:04 pm

Really sad to see all of this unfold.
 
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 2:27 pm

So the 10 year A320 backlog is softer than I thought.
 
Zodiac787
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 2:36 pm

I didnt read the full thread and didn't see it at first glance but please accept my apologies if that has been mentioned before...
Don't forget that AF-KLM just got €10B from their governments, partly justified in the mouth of France's finance minister B. le Maire by the need to support the entire aerospace ecosystem. In his words again, this means, among others, buying newer and greener aircraft...
So, if AF gets 7B€ from the French government, I think it is very logical that Airbus also comes and tells governments that they are in a very strong need of support, possibly voluntarily darkening the situation they are in.
It cannot hurt to do so as it also tells all airlines around the world that they need their support now.
Or am I too evil thinking?
 
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 2:53 pm

Just a reminder to keep your posts on topic and relevant to the discussion. The topic is about Airbus so please if you wish to discuss other things please take it to the relevant thread
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 2:54 pm

Francoflier wrote:
Ah yes. This is the time when large companies and corporations break out the tissues and start coming up with the sob stories of how they're on the verge of collapse after a 10 year run of record profits just to see what juicy 'rescue package' they can get from their government.

2008 all over again.

The old saying "Capitalize profit, socialize loss" rings true as ever.

It's even more galling given how little tax corporations pay.

glideslope wrote:
Agreed. First reductions will be in the UK and US, IMO. This is going to far more complex than the A380 bailout days. Things will get very ugly geopolitically very quickly unless they are smart about spreading the pain. This will be a HUGE Test of EU Leadership. Hope things work out way down the road. It's bad enough with the duopoly the way it was prior to this crisis.

Last time chairs were thrown in the French Senate, shall we will see more restraint this time? :D
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N212R
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 2:54 pm

Francoflier wrote:
The whole dance is just a bit sickening to me, but I suppose that's just the way it works now, especially since many industries, especially aviation, have been the victims of governments' unpreparedness in this case.


What is sickening is the attitude that "unpreparedness" is instinctively laid at the foot of government. Comme quoi l'assistanat francais est aussi un virus.
 
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 3:24 pm

It looks like the Reuters piece https://www.reuters.com/article/us-heal ... SKCN2280S3 has been updated a bit.

It mentions that Airbus lost 4% on the Paris stock market yesterday, making it the biggest loser of the day. Boeing says "hold my beer!".

It reports that Airbus like Boeing is working on both government and commercial support:

People familiar with the matter say Airbus is also in active discussions with European governments about tapping schemes to assist struggling industries, including billions of dollars’ worth of state-guaranteed loans.

It has also lent its weight to calls for airlines to be bailed out, believing that manufacturing aid would only defer the underlying problem unless its customers also survived.

Earlier this month, Airbus expanded commercial credit lines, buying what Faury described in the letter as “time to adapt and resize”.

The big issue seems to be projecting exactly how big the hit to demand will be, and thus how much to cut back.

Industry sources have said a new restructuring plan similar to its 2007 Power8 which saw 10,000 job cuts could be launched in the summer, but Faury indicated the company was already exploring “all options” while waiting for clarity on demand.
...
(Faury) said it was too early to judge the shape and pace of a recovery, but mentioned scenarios including a short and deep crisis with a fast rebound or a longer and more painful downturn with previous demand levels only returning after 5 or 10 years.

Analysts and airlines have so far mostly spoken of a downturn lasting no more than 3-4 years.

So there's about a 40% disagreement in scope, which is a large difference.

As above, Airbus is continuing to evaluate the situation and it should take 2-3 months to do the evaluation.

EDIT: According to Leeham ( https://leehamnews.com/2020/04/27/boein ... ke-longer/ ), Boeing is saying it'll take air traffic 2-3 years to recover, and "longer" for production to recover.
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 3:40 pm

Revelation wrote:
Francoflier wrote:
Ah yes. This is the time when large companies and corporations break out the tissues and start coming up with the sob stories of how they're on the verge of collapse after a 10 year run of record profits just to see what juicy 'rescue package' they can get from their government.

2008 all over again.

The old saying "Capitalize profit, socialize loss" rings true as ever.

It's even more galling given how little tax corporations pay.

glideslope wrote:
Agreed. First reductions will be in the UK and US, IMO. This is going to far more complex than the A380 bailout days. Things will get very ugly geopolitically very quickly unless they are smart about spreading the pain. This will be a HUGE Test of EU Leadership. Hope things work out way down the road. It's bad enough with the duopoly the way it was prior to this crisis.

Last time chairs were thrown in the French Senate, shall we will see more restraint this time? :D


I would hope so. France is really pushing these days to be perceived as "The Leader of the EU" over Brussels. I am very concerned over cuts in the UK pushing an already strained relationship over the cliff. No winners in that scenario.
To know your Enemy, you must become your Enemy.” Sun Tzu
 
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 3:54 pm

N212R wrote:
Francoflier wrote:
The whole dance is just a bit sickening to me, but I suppose that's just the way it works now, especially since many industries, especially aviation, have been the victims of governments' unpreparedness in this case.


What is sickening is the attitude that "unpreparedness" is instinctively laid at the foot of government. Comme quoi l'assistanat francais est aussi un virus.


Well, I meant unpreparedness regarding the virus outbreak, which could have handled this crisis much better resulting in a much lesser impact on the aviation sector, among others...

...so I'm not sure what l'assistanat has to do with any of this.
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 4:12 pm

Revelation wrote:
According to Leeham ( https://leehamnews.com/2020/04/27/boein ... ke-longer/ ), Boeing is saying it'll take air traffic 2-3 years to recover, and "longer" for production to recover.


Two days after 11 September 2001, Boeing cut production rates by around 50% with about that much reduction in staff. There is a belief Boeing could see similar production and staff reductions in response to COVID-19.

Does anyone remember how Airbus responded?
 
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 4:33 pm

With all the massive increases in production over the last decade - why did Airbus not have a bigger rainy day fund? They paid Billions in Euros of Dividends and engaged in stock buybacks to neutralize executive stock compensation.
 
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 4:38 pm

Stitch wrote:
Revelation wrote:
According to Leeham ( https://leehamnews.com/2020/04/27/boein ... ke-longer/ ), Boeing is saying it'll take air traffic 2-3 years to recover, and "longer" for production to recover.


Two days after 11 September 2001, Boeing cut production rates by around 50% with about that much reduction in staff. There is a belief Boeing could see similar production and staff reductions in response to COVID-19.

Does anyone remember how Airbus responded?

The Airbus 2001 annual report says:

Immediately after 11th September, we implemented a number of
concrete actions to secure cash and profitability; these include the
freeze of all investments and hiring (excluding for the A380
programme), and new cost saving plans. Thanks to the very high
degree of flexibility built into our production organisation,
including the high proportion of subcontracting, flexible work
agreements and contracts and short production lead times, we
are well prepared to weather the storm and secure future profits.
Moreover, we have a leading and growing defence business,
which will partly offset the effects of the civil aviation downturn.

And:

Airbus is also actively managing the downturn in the post-September civil aviation
market, and has taken company-wide measures to maintain profitability pre-R&D. These
include the stabilisation of deliveries at about 300 units, a pause in recruitment (except
on the A380 programme) and the implementation of a further number of ongoing
cost savings plans. These steps, combined with highly flexible production systems,
should allow Airbus to maintain in 2002 production costs per unit, despite the decrease
in deliveries. The overall Airbus target is to reduce costs by €600 million per year:
€200 million through R&D reductions on non-critical programmes and €400 million in
overhead cost savings.

Moreover, at a time when customers may require more financing facilities, Airbus has the
flexibility to make decisions to support its customers on a case-by-case basis. Indeed, for
the third consecutive year, Airbus has reduced its customer financial gross exposure
despite the increase in deliveries, and now has the flexibility to increase this exposure, if
needed, under tight control.

Ref: https://www.airbus.com/content/dam/corp ... t-2001.pdf

It also shows their stock price took a steep hit (just like pretty much everything related to aviation). Its high was 25 in June, it tanked to 9 right after the attacks and was back to 15 by March 2002 so quite a bit down from its peak but was trending up.

So, they stopped hiring, reduced spending except for A380, and maintained production levels.

In other words, COVID-19 is a much bigger hit to Airbus than 11 Sept 2001 was.

As Faury said, they've just lost 1/3rd of their business and are preparing to deal with losing even more.
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 4:43 pm

morrisond wrote:
With all the massive increases in production over the last decade - why did Airbus not have a bigger rainy day fund? They paid Billions in Euros of Dividends and engaged in stock buybacks to neutralize executive stock compensation.


Quite simply, capital just sitting around is viewed as being wasted. And institutional shareholders (the ones who control the largest blocks of stock and who are the ones being referred to in the term "shareholder value") don't like to see that so if Executives and Board Members don't do something with it, then they tend to be replaced by Executives and Board Members who will do something with it other than bank it for a 1% return. Or if the company is small enough, they risk being the target of a takeover. This is why Airbus and Boeing and the airlines didn't set up significant "rainy day funds" by banking cash.

I'll be honest - I have never understood how Apple has been allowed to sit on over 200 billion in cash. They do stock buybacks and pay dividends, but realistically they should have been forced to spend that a long time ago. I guess they are extremely lucky that their largest institutional shareholders see more value in that money being available to fund R&D and such.
 
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 4:57 pm

Stitch wrote:
morrisond wrote:
With all the massive increases in production over the last decade - why did Airbus not have a bigger rainy day fund? They paid Billions in Euros of Dividends and engaged in stock buybacks to neutralize executive stock compensation.


Quite simply, capital just sitting around is viewed as being wasted. And institutional shareholders (the ones who control the largest blocks of stock and who are the ones being referred to in the term "shareholder value") don't like to see that so if Executives and Board Members don't do something with it, then they tend to be replaced by Executives and Board Members who will do something with it other than bank it for a 1% return. Or if the company is small enough, they risk being the target of a takeover. This is why Airbus and Boeing and the airlines didn't set up significant "rainy day funds" by banking cash.

I'll be honest - I have never understood how Apple has been allowed to sit on over 200 billion in cash. They do stock buybacks and pay dividends, but realistically they should have been forced to spend that a long time ago. I guess they are extremely lucky that their largest institutional shareholders see more value in that money being available to fund R&D and such.


Thanks - good descriptive answer - but I was being sarcastic. That answer wasn't working a few weeks ago when many people were ranting on about the other company - despite them having the strength to build 400 white tails.

The ironic thing is that in Airbus's Annual report Risk disclosures they specifically talk about a global pandemic as a significant risk factor - but they don't seem to have done much to prepare for it. Why bother when you are almost guaranteed to get a bailout. Same thing for B.

That is not a great way to run a global economy as unfortunately us poor plebe's end up paying for it in the form of much higher taxes and greater government intervention in the economy which has never turned out well.
 
wingman
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 5:01 pm

But boy, when the rainy day comes, as it always does, prudent companies like Apple are the ones that laugh loudest and last. It's too bad we run our country the way most companies are run. The stimulus we're going through now may be a near mortal blow to our long-term economic health, in larger part because we choose to "pay dividends" to our wealthiest shareholders and economic crown jewels without ever concentrating on reducing expenses. Less in and more out is the fastest way to insolvency. But Apple, well it's going into this bloodbath armed to the hilt with survival gear. This could've and should've been us as a country, building a stash during the boom times to use when we needed it most. Three months ago Airbus was on its way to absolute global domination..it sure didn't take long to see that bubble burst. No dig against them, at least they have a solid gold narrow body family. Boeing doesn't have that OR a rainy day fund.
 
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 5:22 pm

wingman wrote:
But boy, when the rainy day comes, as it always does, prudent companies like Apple are the ones that laugh loudest and last. It's too bad we run our country the way most companies are run. The stimulus we're going through now may be a near mortal blow to our long-term economic health, in larger part because we choose to "pay dividends" to our wealthiest shareholders and economic crown jewels without ever concentrating on reducing expenses. Less in and more out is the fastest way to insolvency. But Apple, well it's going into this bloodbath armed to the hilt with survival gear. This could've and should've been us as a country, building a stash during the boom times to use when we needed it most. Three months ago Airbus was on its way to absolute global domination..it sure didn't take long to see that bubble burst. No dig against them, at least they have a solid gold narrow body family. Boeing doesn't have that OR a rainy day fund.

I beg to differ, Boeing was forced by the Max situation to conserve cash, and that is probably going to help them in a better way than Airbus for this crisis. There is no freefall for Boeing during this coronavirus crisis, they have already taken a gradual fall for the past 1 year. 737 Max production has shut down before this crisis hit, meaning much of the overhead was already out of the picture. On the other hand, Airbus is still churning out planes that not many of its customers are going to take for the next 6 - 12 months, with the overheads of a "good" day during a bad situation. That is a sudden shock that I think Airbus is very concerned about. The shock to Boeing, ironically, is not as painful nor sudden than for Airbus. Falling from a high spot to a low spot equal to your competitor is going to be more painful than your competitor who fell from a much lower height. At least Boeing has cargo planes to deliver during this period.

Anetters seem less concerned than Airbus management on Airbus's future, I wonder why?
 
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Re: Airbus CEO: "“We’re bleeding cash at an unprecedented speed, which may threaten the very existence of our company,”

Mon Apr 27, 2020 5:28 pm

VS11 wrote:
strfyr51 wrote:
VS11 wrote:

The age of frequency is over for the next couple of years. Some trunk routes can be running on a once-daily A380.

you can't be serious! An A380 trunk route? From where to where?? And? who is goin to FLY said Route??


Yes. NYC-London/Paris/Frankfurt. It is a big airplane that provides more room for social distancing. DL CEO said last week that their strategy is to focus on customers willing to pay premium for quality - meaning airlines minimizing risks for contagion. So yes, bigger planes can definitely play a role. But I am not suggesting that airlines go out and buy A380's.


No aircraft can fly profitably with "social distancing" without drastically increasing the fares. Bigger planes will be worse I would think. They have more space but also more weight.
 
Cdydatzigs
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Re: Airbus CEO: "“We’re bleeding cash at an unprecedented speed, which may threaten the very existence of our company,”

Mon Apr 27, 2020 5:28 pm

AvFanNJ wrote:
I'm really shocked to hear this so soon since I felt Airbus was in a much better position than Boeing due to A. not having a problem child liked the 737 MAX and B. having the new and relatively hot selling A220 which has virtually no competition in its stable.


Boeing has a very lucrative military and aerospace division to fall back on, Airbus' isn't nearly as much.
 
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 5:47 pm

Revelation wrote:
Stitch wrote:
Revelation wrote:
According to Leeham ( https://leehamnews.com/2020/04/27/boein ... ke-longer/ ), Boeing is saying it'll take air traffic 2-3 years to recover, and "longer" for production to recover.


Two days after 11 September 2001, Boeing cut production rates by around 50% with about that much reduction in staff. There is a belief Boeing could see similar production and staff reductions in response to COVID-19.

Does anyone remember how Airbus responded?

The Airbus 2001 annual report says:

Immediately after 11th September, we implemented a number of
concrete actions to secure cash and profitability; these include the
freeze of all investments and hiring (excluding for the A380
programme), and new cost saving plans. Thanks to the very high
degree of flexibility built into our production organisation,
including the high proportion of subcontracting, flexible work
agreements and contracts and short production lead times, we
are well prepared to weather the storm and secure future profits.
Moreover, we have a leading and growing defence business,
which will partly offset the effects of the civil aviation downturn.

And:

Airbus is also actively managing the downturn in the post-September civil aviation
market, and has taken company-wide measures to maintain profitability pre-R&D. These
include the stabilisation of deliveries at about 300 units, a pause in recruitment (except
on the A380 programme) and the implementation of a further number of ongoing
cost savings plans. These steps, combined with highly flexible production systems,
should allow Airbus to maintain in 2002 production costs per unit, despite the decrease
in deliveries. The overall Airbus target is to reduce costs by €600 million per year:
€200 million through R&D reductions on non-critical programmes and €400 million in
overhead cost savings.

Moreover, at a time when customers may require more financing facilities, Airbus has the
flexibility to make decisions to support its customers on a case-by-case basis. Indeed, for
the third consecutive year, Airbus has reduced its customer financial gross exposure
despite the increase in deliveries, and now has the flexibility to increase this exposure, if
needed, under tight control.

Ref: https://www.airbus.com/content/dam/corp ... t-2001.pdf

It also shows their stock price took a steep hit (just like pretty much everything related to aviation). Its high was 25 in June, it tanked to 9 right after the attacks and was back to 15 by March 2002 so quite a bit down from its peak but was trending up.

So, they stopped hiring, reduced spending except for A380, and maintained production levels.

In other words, COVID-19 is a much bigger hit to Airbus than 11 Sept 2001 was.

As Faury said, they've just lost 1/3rd of their business and are preparing to deal with losing even more.

I would be shocked if they (or Boeing) lost only a third if business. In my opinion, this is multiples of 911 as people are now afraid of crowds. I've flown to multiple cities to participate in large events. I don't know anyone who will in 2020. Both myself and my ex-wife were planning cruises (seperate) for the kids. My parents also cancelled cruise plans in Europe.

Production of every model needs to be cut 40% to... well, shut down. The prior cuts were for shorter lockdowns.

To others:

We were already in a widebody glut. That was going to be ugly even before oil prices crashed and this lockdown persisted.

I had proposed that narrowbody production was so high as to be starting a glut. Well... Huge glut.


We also have another financial crisis. Until the junk bond market recovers, we


Please everyone take time to read the Airbus Global Market Forecast:
https://www.airbus.com/aircraft/market/ ... ecast.html

There is no expansion for 2 or 3 years. Yet Airbus notes 64% of aircraft are for growth. Errr... We'll have growth again, but this is global. The demand for 39,000 new aircraft over 20 years was being front loaded. I think the 20 year demand lost:

2500 near term new aircraft demand.
Is resetting the baseline, so demand is closer to 30,000 aircraft. So there is a future. How to cut costs 2020-2022?

Lightsaber
Flu+Covid19 is bad. Consider a flu vaccine, if not for yourself, to protect someone you care about.
 
morrisond
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 7:29 pm

lightsaber wrote:
Revelation wrote:
Stitch wrote:

Two days after 11 September 2001, Boeing cut production rates by around 50% with about that much reduction in staff. There is a belief Boeing could see similar production and staff reductions in response to COVID-19.

Does anyone remember how Airbus responded?

The Airbus 2001 annual report says:

Immediately after 11th September, we implemented a number of
concrete actions to secure cash and profitability; these include the
freeze of all investments and hiring (excluding for the A380
programme), and new cost saving plans. Thanks to the very high
degree of flexibility built into our production organisation,
including the high proportion of subcontracting, flexible work
agreements and contracts and short production lead times, we
are well prepared to weather the storm and secure future profits.
Moreover, we have a leading and growing defence business,
which will partly offset the effects of the civil aviation downturn.

And:

Airbus is also actively managing the downturn in the post-September civil aviation
market, and has taken company-wide measures to maintain profitability pre-R&D. These
include the stabilisation of deliveries at about 300 units, a pause in recruitment (except
on the A380 programme) and the implementation of a further number of ongoing
cost savings plans. These steps, combined with highly flexible production systems,
should allow Airbus to maintain in 2002 production costs per unit, despite the decrease
in deliveries. The overall Airbus target is to reduce costs by €600 million per year:
€200 million through R&D reductions on non-critical programmes and €400 million in
overhead cost savings.

Moreover, at a time when customers may require more financing facilities, Airbus has the
flexibility to make decisions to support its customers on a case-by-case basis. Indeed, for
the third consecutive year, Airbus has reduced its customer financial gross exposure
despite the increase in deliveries, and now has the flexibility to increase this exposure, if
needed, under tight control.

Ref: https://www.airbus.com/content/dam/corp ... t-2001.pdf

It also shows their stock price took a steep hit (just like pretty much everything related to aviation). Its high was 25 in June, it tanked to 9 right after the attacks and was back to 15 by March 2002 so quite a bit down from its peak but was trending up.

So, they stopped hiring, reduced spending except for A380, and maintained production levels.

In other words, COVID-19 is a much bigger hit to Airbus than 11 Sept 2001 was.

As Faury said, they've just lost 1/3rd of their business and are preparing to deal with losing even more.

I would be shocked if they (or Boeing) lost only a third if business. In my opinion, this is multiples of 911 as people are now afraid of crowds. I've flown to multiple cities to participate in large events. I don't know anyone who will in 2020. Both myself and my ex-wife were planning cruises (seperate) for the kids. My parents also cancelled cruise plans in Europe.

Production of every model needs to be cut 40% to... well, shut down. The prior cuts were for shorter lockdowns.

To others:

We were already in a widebody glut. That was going to be ugly even before oil prices crashed and this lockdown persisted.

I had proposed that narrowbody production was so high as to be starting a glut. Well... Huge glut.


We also have another financial crisis. Until the junk bond market recovers, we


Please everyone take time to read the Airbus Global Market Forecast:
https://www.airbus.com/aircraft/market/ ... ecast.html

There is no expansion for 2 or 3 years. Yet Airbus notes 64% of aircraft are for growth. Errr... We'll have growth again, but this is global. The demand for 39,000 new aircraft over 20 years was being front loaded. I think the 20 year demand lost:

2500 near term new aircraft demand.
Is resetting the baseline, so demand is closer to 30,000 aircraft. So there is a future. How to cut costs 2020-2022?

Lightsaber


Over three years 2,500 less? Call it 800 frames per year? Rate 40 on the NEO seems too high.
 
StTim
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 7:38 pm

william wrote:
So the 10 year A320 backlog is softer than I thought.



Not a single order at any manufacturer can currently be considered firm. What the situation was in January and now are really worlds apart.
 
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Mon Apr 27, 2020 8:16 pm

Couldn't get the image to copy and paste. But here are several of the most respected companies and what they have done with some of their cash
https://www.cnbc.com/2019/11/07/microso ... -cash.html

The primary reason to carry cash in the books is because a company cannot figure out a good way to invest it. Some of the money should flow to investors, some to customers with better products or lower prices, some to workers. And a whole hell of a lot in the bank. It is available for any of the previous purposes, or to weather storms. But then, what does the aviation industry know about stormy weather? (sarcasm, in case you didn't notice).
Buffet: the airline business...has eaten up capital...like..no other (business)
 
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Re: Airbus CEO: "“We’re bleeding cash; may threaten existence of company"

Tue Apr 28, 2020 4:56 am

StTim wrote:
william wrote:
So the 10 year A320 backlog is softer than I thought.

Not a single order at any manufacturer can currently be considered firm. What the situation was in January and now are really worlds apart.

Perhaps only Singapore Airlines' orders are the only ones that can be considered firm!

SIA Group reserves liquidity for aircraft purchases

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