Airlines Will Take Up to Five Years to RecoverBy Alessa Flores | Thu, 04/30/2020 - 13:11
The impact of COVID-19 has been especially heavy on manufacturing sectors and airlines. According to Guillaume Faury, Airbus Chief Executive “the crisis for airlines is expected to take three to five years to recover” and it will end when passengers have the desire to travel once more. Faury stressed the sector is “now in the midst of the gravest crisis the aerospace industry has ever known,” according to a note from Guardian.
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While the aerospace industry began 2020 with a positive outlook, low demand for aircraft and supply chain disruptions caused by the COVID-19 outbreak have set the sector back. In their 1Q20 reports, aerospace giants Airbus and Boeing both cite the outbreak as a key contributor to industry’s woes. While it is still too early to measure the full effects of the pandemic, its impact might be felt across the entire aerospace supply chain.
IATA tracked the impact of confinement measures on the industry and reported demand measured in total revenue passenger kilometers (RPK), which are the number of paying passengers multiplied by the distance they traveled, fell by 52.9 percent in March when compared to the same month in 2019. “March was a disastrous month for aviation. Airlines progressively felt the growing impact of the COVID-19-related border closings and restrictions on mobility, including in domestic markets,” said Alexandre de Juniac, Director General and CEO of IATA.
French plane maker 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 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.
Airbus Helicopters Meet Nova Systems
Airbus Helicopters signed an agreement to work with Nova Systems, an Australian defense and aerospace equipment company. The two companies will collaborate on the procurement of supplies, support services, personnel relocation and supply of resources. According to Andre Mathewson, Managing Diretcor of Airbus Australia Pacific, this agreement “sets the framework for a long-term collaborative relationship.”