More Furloughs Will Reduce Airbus’ Commercial Output to Face the Collapse of Air Travel, says GlobalData

June 22, 2020

Following the news that Airbus will furlough 5,300 staff in Spain and the UK;

Nicolas Jouan, Aerospace and Defense Analyst at GlobalData, a leading data and analytics company, offers his view on Airbus’ situation:

“The list of Airbus’ furlough schemes is growing. The company already reduced production rates of its main commercial platforms by 40%, including the A320neo which has seen stalled sales of 47 net orders in 2020, according to Airbus’ figures. The company has tended to be risk averse in managing the COVID-19 crisis and uncertainty still surrounds the potential recovery of commercial aviation. It is now clear that Airbus’ pre-crisis output at around 60 A320 per month is far too high to be sustainable in the medium term.

“Disruption has been concentrated on commercial aerospace so far as Airbus’ furlough in Spain suggests. No staff from the defense or helicopter divisions are concerned. Questions remain on how much capacity Airbus can still cut in its commercial division after a previous furlough scheme at its Welsh assembly line and work reduction in other main locations such as France.

“Recent A320neo and A350 order deferrals from Iberia showed that the market is unlikely to recover completely for at least 3 to 5 years. Overproduction is a perspective that plane manufacturers absolutely want to avoid, and furloughs are a convenient way to adapt to an erratic demand. More staff adjustments are therefore to be expected in the near term in the commercial aerospace division of Airbus.”