Airbus will consider increasing production of its A320 single-aisle aircraft as early as the second half of next year, according to chief executive Guillaume Faury, offering a rare glimmer of hope to an industry devastated by the collapse in global aviation as a result of the coronavirus pandemic.
Mr Faury, announcing a swing into loss for the first half, placed heavy caveats around the timing of any return to production growth given the uncertainty still hanging over the outlook for air travel.
Several countries have in recent weeks suffered spikes in infection rates after easing lockdown restrictions. But production of the A320, considered a workhorse of short haul aviation, could be expected to increase again by 2022, and “potentially starting in the second half of 2021”, he said in response to questions from analysts.
He also pledged by the end of the year to stem the €4.4bn cash burn experienced in the second quarter. “The impact of the Covid-19 pandemic on our financials is now very visible,” he said. “It is our ambition to not consume cash before M&A and customer financing in the second half.”
Boeing and Airbus combined are cutting some 35,000 jobs in the coming months as they scale back production by more than a third to adapt to a collapse in aircraft demand.
Boeing yesterday announced its second steep cut in production rates in three months, including the end of the superjumbo 747 line by 2022, and warned that further job losses could be expected.
Airbus, which in April scaled back production of its jets by between a third and 40 per cent, on Thursday reduced the rate of its A350 wide-body from six to five a month, reflecting industry expectations for a protracted downturn in long-haul travel.
Mr Faury said visibility on aircraft demand was improving, even for widebody aircraft, but the exact timing of a return to production growth on the single-aisle family of aircraft was still “beyond our firm horizon”.
In the interim, the group was taking measures to conserve cash. Its ambition was to be cash neutral despite announcing an expected charge of between €1.2bn and €1.6bn to pay for the biggest job reduction plan in its history. Some 15,000 jobs will be cut from the commercial aircraft division — roughly 17 per cent of its workforce — by summer of next year.
Due to the crisis, Airbus had been left with 145 completed aircraft that could not be delivered by the end of the first half. Mr Faury said he hoped to reduce the number “significantly” by the end of the year but there could be some left in storage for longer.
Total deliveries were about 50 per cent lower for the first six months. Deprived of the usual payments from customers that land on delivery, Airbus reported a €12.4bn outflow of cash in the first half, before any deals or customer financing, up from a deficit of €4bn last time. Roughly €4.4bn of the outflow came in the second quarter, on par with the first quarter if the fine to settle a global bribery investigation is excluded.
The group scored a net 298 commercial aircraft orders in the first half, with just eight in the second quarter. A total of 196 passenger jets were delivered in the first six months against 389 last year.
Consolidated net debt stood at €586m at the end of June against year-end net cash of €12.5bn.
The group reported a first-half net loss of €1.9bn against net income of €1.2bn in the same period last year.
The company suffered a 39 per cent drop in consolidated revenues to €18.9bn, driven by the difficult market environment.
In the second quarter, revenues fell 55 per cent to €8.3bn, generating a net loss of €1.4bn against income last year of €1.2bn. The commercial aircraft division reported a headline loss before interest and tax of €1.9bn against a profit of €1.7bn last time.
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