You are here
Airbus lifts liquidity to 30b euros to ride out pandemic
AIRBUS SE withheld its dividend and extended credit lines, lifting liquidity about 50 per cent to 30 billion euros (S$46.8 billion) after the coronavirus pandemic pushed its airline customers to halt flights and stop ordering planes.
The European manufacturer also tore up earnings guidance for the year in an announcement on Monday and said its vast supplier network is in dire need of government support, though the company itself isn't yet seeking a bailout.
The global aviation industry has been among sectors hit hardest by the health crisis, with airlines pushing back against taking existing deliveries, let alone purchasing extra jets.
Airbus plans to continue production for the moment but said the wide-body market in particular will be depressed and that "operational scenarios" could be activated depending on the virus's spread.
"These are indeed exceptional times," chief executive officer Guillaume Faury said on a conference call, adding that the extra funding is aimed at "safeguarding our business to protect the future of Airbus and to ensure we can return to efficient operations once the situation recovers."
Making deliveries is getting increasingly difficult and the company is looking at possibilities for storing finished aircraft, according to the CEO, who said there should be a return to a higher number of handovers sometime in the second half.
Airbus canned a shareholder dividend that would have cost it 1.4 billion euros and has also converted a credit facility of about five billion euros into a new line amounting to 15 billion euros. The Toulouse, France-based company, which has an existing three billion-euro credit and a further 12 billion euros in financial assets, will also suspend a top-up in pension funding.
Airbus had aimed to hand over about 880 jets this year, up from 863 in 2019, which was already a record. It had targeted free cash flow of four billion euros, a 500 million-euro increase.
The company shuttered operations in France and Spain last week for cleaning and to separate workers into smaller groups, and a plane this weekend brought in two million face masks. Facilities were due to partially reopen on Monday, but it said workstations will close where employee safety can't be 100 per cent guaranteed. BLOOMBERG