The CEO of Airbus (AIR.PA) told employees in a memo that the European planemaker is “bleeding cash” and needs to rapidly cut costs in order to survive the impact from the coronavirus pandemic.
“We’re bleeding cash at an unprecedented speed, which may threaten the very existence of our company,” he said in the memo, cited by media outlets. “We must now act urgently to reduce our cash-out, restore our financial balance and, ultimately, to regain control of our destiny.”
Airbus told Yahoo Finance UK that it did not comment on internal communications.
The coronavirus pandemic has significantly affected all industries across the globe as governments placed citizens under strict social-distancing measures in order to battle the spread of COVID-19.
Airbus has been particularly affected as its core manufacturing nations — France, Spain, Britain, and Germany — placed their populations in lockdown in mid-March.
The International Monetary Fund (IMF) said the global pandemic is likely to cause the worst recession since the Great Depression of the 1930s and do lasting damage to the global economy.
On 8 April, Airbus cut production to help ease the impact to manufacturing from the coronavirus pandemic.
It announced it was reducing output of its best-selling A320 narrow-body family by a third, marking the largest ever production adjustment for the manufacturer. It also cut production of larger wide-body A350 jets to just six aircraft a month, and cut the A330 family down to two aircraft a month. It has also furloughed about 3,000 French staff and boosted its liquidity by €15bn (£13bn, $16bn).
A week later, the International Air Transport Association (IATA) said that estimated global airline losses from the impact of COVID-19 have risen to $314bn. This is 25% more than previously forecasted. This is also due to a 55% drop in 2020 passenger revenue compared with last year.