Airbus is struggling to survive

Airbus, in a letter to it’s employees, announced mass layoffs and nearing bankruptcy. Guillaume Fauri, CEO of airbus, continues saying that because of order cancelation, they already lost a third of their buisness, and considering that there are no signs of pandemic stopping in the upcoming weeks, it seems like a good outcome. He also announced that they will be cutting their production rates: A320 by a ⅓, A330 and A350 by 40%.

Source

https://www.theguardian.com/business/2020/apr/27/airbus-job-cuts-staff-coronavirus-lockdown

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Holy crap. This is not good… 😰

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Yet business has been booming… what happened to all the money for the A320neo orders? Surely that should cover the cost of research and development especially considering it was a modified model from an already existing aircraft.

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They already lost a third of their orders, and it seems like it won’t stop soon

So they gave out refunds?

Ohh, that’s bad 😳


@Nate_Schneller what are you doing up at 2:45 am, oh wait, I’m up now too 😳

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Not the downpayments, but a third of their orders, even without downpayments, seems like a very big sum of money

Well good think at least Boeing’s doing just fi…

Oh wait…

Boeing’s had a fair few months to experience almost fully stalled production.

Money is paid upon delivery and with so many travel restrictions in place it’s very difficult to deliver an aircraft in the moment, even if it’s ready for delivery and still wanted by the customer.
Many customers also don’t want their deliveries in the moment.

I had no idea about that. I thought airlines pay upfront (or later to a leasing company) and can convert the order to options or to other aircraft if they wish.

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I am pretty sure that’s the way it’s done (probably watch the Air Baltic A220 delivery on YT, where they say it too to confirm).

An aircraft remains the manufacture’s property till the payment on delivery as far as I am aware.

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Every benefits are used to expand the business most of the time. If there are no income and expenditure keep happening (fixe charges like salaries or material transport), airbus will soon be in dept (like many big companies).

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That makes sense because a few aircraft (like 787 and 747-8) have been left without an owner after manufacture because the owner decided not to take delivery.

Yes, this is the problem here. I was just surprised the money is paid after Airbus has spent so much manufacturing the aircraft.

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Exactly!

I haven’t replied to this part here, sorry!
This is possible and often done because just stepping back from the contract would be bad for both sides (penalties for the airline and no orders for the manufacturer), but real money is only paid upon delivery as said before.

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I wonder how Boeing, Embraer and Bombardier are doing too.

Oh wow I wasn’t expecting it to be this bad 😦

Well I think Boeing is in just as much of a pickle as them.

Why… Boeing and Embraer falling out, now Airbus struggling. Not to even mention the situation over at South African. This year is not going to be on to remember.

I think we can safely say that this year is basically a hard reset of the industry.

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