Airbus slashes internal travel, events in drive to reduce costs

AIRBUS has clamped down on internal travel and events as part of a cost-cutting drive at the European planemaker, according to people familiar with the matter.

While customer-facing employees are still required to be on the road, other functions are being asked to justify any additional spending, said the people, asking not to be identified discussing internal policies. A spokesperson for Airbus declined to comment.

Airbus initiated a savings project called Project Lead in response to persistent supply chain constraints that are weighing on its delivery and production goals.

Christian Scherer, who oversees Airbus’s commercial airline business, said at the Farnborough Airshow last week that the programme aims to reconcile spending with a production ramp-up plan that “was going to be a little bit higher than what it turns out to be”.

Scherer initially sent out a company-wide directive laying out the cost-saving effort a few weeks ago, and individual departments have since followed up with their own specific requests to trim costs, some of the people said. 

Last month, the company cut its forecast for adjusted earnings before interest and tax to 5.5 billion euros (S$8 billion) this year, from a previous goal of as much as seven billion euros. It also cut its outlook for free cash flow before customer financing to about 3.5 billion euros. 

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Airbus will report full earnings for the first half on Tuesday. BLOOMBERG