Airbus cuts output by a third amid virus woes

New York

AIRBUS slashed its aircraft output by a third in a stark concession to the coronavirus pandemic that's upended the aviation industry.

The world's biggest commercial aircraft manufacturer now plans to produce about 48 planes a month across its A320, A330 and A350 programmes, it said on Wednesday in a statement. It had gone into the year with a goal of handing over about 880 planes, or an average of 73 per month.

The rapid spread of the virus has caused unprecedented dislocation in the aviation market, with planes grounded worldwide and cash-strapped airlines deferring jet deliveries while seeking bailouts to survive. The demand drop, along with parts shortages and health concerns, has forced Airbus and its US rival Boeing to pause production at some plants while sizing up the longer-term damage.

Airbus will produce about 40 of its top-selling A320 narrow-body each month, it said, while reducing rates on the advanced A350 wide-body to six a month. The slower-selling A330 will limp along at two a month, raising a question about whether the programme can remain viable. The company plans to assess production on a monthly basis, chief executive officer Guillaume Faury said on a call with reporters.

"Don't expect orders to be the name of the game for the next six, nine, 12 months," Mr Faury said. "We're managing for the moment, using all the flexibility we have."

The planemaker said it was still assessing demand for the smaller A220 narrow-body, its newest jet series, and that it wouldn't alter its plan to wind down the A380 programme.

Just months ago, Airbus was aiming for record jetliner deliveries in 2020 and looking at how to speed up its assembly line to clear a large backlog of orders. Now, the situation has reversed with production targets slashed and airlines asking to defer handovers.

Mr Faury said over-booking was no longer an issue, and that Airbus is mobilising to deal with supply-chain issues and deferral requests. The company faces a delicate balancing act to offer its airline customers the flexibility they need while also not cutting off income vital to its subcontractors. BLOOMBERG