https://images.moneycontrol.com/static-mcnews/2020/09/Airbus-770x433.jpg?impolicy=website&width=770&height=431

Airbus CEO Guillaume Faury warns of compulsory layoffs as airline crisis deepens

Airbus has repeatedly warned that the outlook is uncertain as the industry's worst crisis hits aircraft deliveries and severely weakens airline finances.

by

Airbus has stepped up warnings of compulsory layoffs as air travel fails to recover as quickly as expected from the coronavirus crisis, putting itself on a potential collision course with unions and the French government.

The warning in a letter to its 130,000 staff from Chief Executive Guillaume Faury, seen by Reuters, marks a more pessimistic tone from the planemaker, which had previously said only that it could not rule out compulsory measures.

"I owe it to you to be transparent: it's unlikely that voluntary departures will be enough," Faury wrote in the letter distributed on Friday evening.

Unions and the French government have urged the Toulouse-based planemaker to avoid compulsory layoffs as it sheds up to 15,000 posts to cope with plummeting travel demand.

COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more Show

Airbus has repeatedly warned that the outlook is uncertain as the industry's worst crisis hits aircraft deliveries and severely weakens airline finances.

But a disappointing rise in air travel over the summer has cast a fresh pall over the company's biggest ever restructuring plans.

"Unfortunately, the recovery in airline traffic over the summer period has not been at the level the industry was counting on," Faury wrote.

"We must now prepare for a crisis that will probably be even deeper and longer than the previous scenarios suggested".

The group representing most of the world's airlines, the International Air Transport Association, said last week that air traffic had failed to recover as quickly as expected during July, a key part of the peak season for airline revenues.

July traffic was down 80% compared with the same month of 2019, compared with a 94% drop at the low point in April.

IATA says inconsistent border rules are hampering the recovery, making it difficult for airlines to plan ahead.

Airbus reported solid deliveries for August, but industry sources say many aircraft are going straight into storage.

An Airbus spokesman confirmed that Faury had issued a "general business update" to staff.

"This is part of the constant dialogue between Airbus’ top management and employees, which is crucial in these challenging times in order to ensure transparency and share information with our global workforce," the spokesman said by email.

He declined further comment.

An official with France's CGT union accused Airbus of deliberately stoking up staff anxieties ahead of further labour negotiations starting in one week.

Airbus has so far launched an internal call for voluntary departures and early retirements, in a scheme expected to run until the end of the year.

Follow our full coverage of the coronavirus pandemic here.