Airbus’ Plan to Tackle COVID-19 Blues

Written by Eashan Trehan

The aviation industry has been one of the most profound casualties of the Covid-19 pandemic, with passenger volumes crashing and airlines becoming strapped for cash. In such a dismal environment, airplane manufacturer Airbus is facing unprecedented headwinds and is caught in a dilemma between conserving cash or coming to the aid of its suppliers who are significantly dependent on the France-based manufacturer’s orderbook of planes.

Airbus’ pending order book has 135 planes waiting to be delivered, after it recently delivered 10 planes post entering into storage agreements with airlines that did not have sufficient demand to make use of these 10 planes that they had ordered before the pandemic struck. The company has halved the production output of its widebody A350 aircraft to 5 a month, while asking suppliers to prepare for a hike in demand for its A320 aircraft models. Airbus’ management has appeared to be quite resilient with its targets, even as several airlines around the globe struggle to remain in business.

But with Europe facing a second wave of Coronavirus cases, a hard Brexit becoming a more likely outcome, and France recently declaring a lockdown, the commentary being heard from Airbus’ management may perhaps be more than just a touch too optimistic.

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