PARIS (Reuters) – European planemaker Airbus (AIR.PA) is in talks with the French state regarding possible support for aircraft deliveries, even though it has no liquidity problems at present, Airbus Chief Executive Guillaume Faury said on Thursday.
FILE PHOTO: The logo of Airbus is pictured at the aircraft builder’s headquarters of Airbus in Colomiers near Toulouse, France, November 15, 2019. REUTERS/Regis Duvignau
“In crises of such importance, and crises which are as global as this, one needs states to help. States have an absolutely essential role to play,” Faury told RTL radio.
“We are holding very frequent discussions. The state is very willing to listen, and is very understanding of our position,” Faury said.
Airbus shares rose 9%.
Last month Airbus (AIR.PA) boosted its liquidity with a 15-billion-euro expanded credit facility.
“We are no longer in a problem of liquidity but one of adapting to the situation,” Faury said.
“What we need to survive is to have a certain number of deliveries of aircraft. So the first priority is to get traffic moving and help airlines who have been impacted in a very brutal and severe fashion to survive and resume their activities.”
Faury, who last week told Airbus employees that the company’s survival was in question without immediate action, told RTL that there was a need for export financing support.
Export credit agencies played a key role in keeping deliveries moving during the 2009 financial crisis, but their role has since diminished. European nations withdrew the support during most of a four-year corruption investigation culminating in a record 3.6-billion-euro fine against Airbus in January.
The scheme was revised last year on a case-by-case basis but volumes of activity have remained lower than in the past.
French Finance Minister Bruno Le Maire said earlier this week that the French state was ready to provide “massive” support to Airbus, if the circumstances arose.
On Wednesday, Airbus said it did not immediately see a need for further government support as it posted sharply lower first-quarter profits.
FURLOUGHS
Airbus has cut production, implemented furloughs and slowed future development spending but is not shielded from further problems as the industry faces its worst crisis, Faury told RTL.
Airbus expanded furlough schemes this week by sending home 3,200 workers in Britain after putting 3,000 workers on government-backed partial unemployment schemes in France, and the group said thousands of German staff could also be affected.
The company has not ruled out mandatory job cuts but says it is taking time until around June to understand airline demand and the shape of the economic recovery to assess further steps.
Faury said the crisis threatened the situation of roughly 3,200 aerospace suppliers in France and called for joint industry action to protect the fragile sector.
Airbus is producing at a slower rate as it adapts to new health restrictions, he said.
Industry sources said have said Airbus is producing few aircraft due to social-distancing measures and gaps in the supply chain and must speed up production to meet a newly revised target of 40 narrowbody planes a month, down from 60.
Faury said he was in favour of passengers wearing masks rather than airlines being forced to block middle seats as flights resume.
Additional reporting by Tim Hepher; Editing by David Evans and Giles Elgood