Airbus’ “Survival at Stake” as COVID-19 Crisis Continues

French planemaker Airbus warned its 135,000 employees that the company’s survival is “at stake,” as the COVID-19 crisis continues to plague the global aviation industry. Faced with a reduction in orders, plane makers have cut down production and shelved expansion plans made just a few months earlier when the industry’s main concern was keeping up with a growing demand. After facing several cancellations from major clients including LATAM airlines and SaudiGulf airlines, Airbus cut down production of its A320 from 60 to 40 jets per month and of its A350 from 10 to six and cancelled the construction of a new assembly line in Toulouse. The company has also begun to furlough workers at two of its production plants, 3,000 in France and a further 3,200 in Wales.

Despite these measures, the OEM continues to be in a precarious position and is considering further measures to stay afloat. In a letter to its employees obtained by Reuters, the French plane maker warned that the company’s survival was at stake and asked employees to brace for further potential job cuts. “The survival of Airbus is in question if we do not act now,” said Guillaume Faury, Chief Executive of Airbus. Faury explained that the OEM was bleeding cash at an unprecedented rate and claimed that the company was analyzing its options until the sector recovers but at this point, it is uncertain of when that will happen.

The impact of these measures in Mexico is uncertain. The OEM has a plant in Queretaro that manufactures emergency exits for the Airbus A320 and an helicopter division. The latter also provided urban air mobility services under the name Voom in Mexico City, Sao Paulo and San Francisco but ceased operations in late March in part due to COVID-19. While Airbus’ largest assembly and manufacture plants are not in Mexico, many of local aerospace companies supply to the French OEM so a further halt in production might have repercussions in the Mexican aerospace industry.