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Airbus fails to log any jet orders as airlines hunker down

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Airbus SE failed to secure a single plane order in May after a global travel slump brought on by the coronavirus pandemic forced airline customers to pull back on spending commitments.

[TOULOUSE] Airbus SE failed to secure a single plane order in May after a global travel slump brought on by the coronavirus pandemic forced airline customers to pull back on spending commitments.

The Toulouse, France-based planemaker handed over 24 aircraft to customers during the month, it said in a statement Friday. No orders were cancelled, Airbus said - itself a victory during an unprecedented downturn.

Airbus has already lowered build rates by more than a third and is considering a further reduction as it shrinks its business to adapt to a depressed market, people familiar with the situation have said. The manufacturer has entered talks with labour groups that could lead to thousands of permanent job cuts, following similar moves by US rival Boeing Co and UK engine maker Rolls-Royce Holdings Plc.

The sales tally for the first five months remained at 299 planes net of cancellations, Airbus said. Airlines desperate to protect cash are focused on deferring or cancelling existing purchases rather than making new ones, leading to the company's second month this year with no new orders.

Handovers were aided by the introduction of an e-delivery process that helps airlines avoid Covid-19-related risks by delegating technical checks to the manufacturer's own engineers.

FEWER DELIVERIES

Indian budget airline IndiGo, one of the few airlines which has said it will continue to add to its fleet through the downturn, made up a quarter of the month's deliveries, taking six planes.

Air France-KLM accepted one aircraft, even as it secured a multi-billion euro state rescue. Officials in France, one of Airbus's top shareholders along with Germany, have sought to ensure the flag carrier keeps purchasing new aircraft, partly due to the environmental priority of reduced emissions.

The latest delivery figures also show the lack of demand for wide-body aircraft in the market amid travel restrictions and predictions long-haul flights won't rebound until 2023. Just four of the 24 aircraft handed over to airlines in May were larger jetliners.

Airbus' figures have so far held up better than at Boeing, where the 737 MAX model remains grounded. Howeer, analysts have warned that the European company has more exposure to planemakers that have declared bankruptcy, underscoring the urgency to act.

Chicago-based Boeing is scheduled to report its monthly order-and-delivery figures next week.

PRODUCTION, JOBS

Airbus chief executive officer (CEO) Guillaume Faury said in April he would revisit production capacity this month, and executives are said to be assessing measures including reduced rates for the top-selling A320-family model.

The CEO has signalled the need to slash jobs, telling managers the company must "act fast" and secure union agreements on cutbacks by early summer.

The company's European Works Council is due to meet next week to discuss headcount reductions, people familiar with the matter have said. Any decision on staffing levels would likely go hand-in-hand with production changes, people familiar with the matter said, as Airbus seeks to keep labor representatives onboard.

Currrently, all commercial aircraft staff in Toulouse are furloughed for an average of 30 per cent of working time.

At the Broughton wing plant in the UK, Airbus is preparing to offer voluntary buyouts to about 500 staff, the Guardian reported earlier. About 200 staff in Filton who make wings for the A400M military aircraft will be furloughed starting Monday, a person familiar with the matter said.

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