Airbus’s Global Footprint Becomes a Burden in a Shrinking Market (excerpt)
(Source: Bloomberg News; published June 8, 2020)
By Charlotte Ryan
Over the past dozen years, Airbus SE has grown from a European planemaker with purely local production into a global manufacturer with assembly lines on three continents that give it more clout to win orders around the world.

But as the aviation industry enters its most dramatic downturn ever, the company is finding that broad reach turning from an asset into a burden.

Senior management came together on a conference call on June 5 to discuss their response to the crisis, people familiar with the discussion said. Chief Executive Officer Guillaume Faury had already warned that Airbus must act to cut staff because it’s bleeding cash. Highlighting the urgency, the planemaker garnered zero new orders and just 24 aircraft deliveries for the month of May.

Airbus already cut production targets, adapting to the new reality in the immediate aftermath of a global travel lockdown that started in mid-March. But with airlines warning that a recovery won’t be imminent, manufacturers face the tough question of whether deeper cuts are needed, and where the ax should fall first.

“They’ve got to decide what size of production system they want to meet that new level of demand,” said Sash Tusa, an analyst at Agency Partners LLC in London. “The big issue there is going to be, can Airbus afford the luxury of having production in five different countries.” (end of excerpt)


Click here for the full story, on the Bloomberg website.

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