Airbus bolsters liquidity and resumes production

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Airbus has announced measures to bolster its liquidity and balance sheet in response to the Covid-19 pandemic as it continues to assess the ongoing situation and the impact on its business, customers, suppliers and the industry as a whole.

In order to ensure financial flexibility, Airbus’s management have received approval from the board of Directors to implement several measures, including securing a new credit facility amounting to €15 billion in addition to the existing €3 billion revolving credit facility; withdrawing the 2019 dividend proposal of €1.80 per share with an overall cash value of approximately €1.4 billion; and suspending its voluntary top-up in pension funding.

Given the uncertainty of the evolving Covid-19 situation, Airbus has withdrawn its 2020 guidance. Operational scenarios, including measures to minimise cash requirements, have been identified and will be activated depending on the further development of the pandemic.

Guillaume Faury, CEO of Airbus explained, “Our first priority is protecting people while supporting efforts globally to curb the spread of the coronavirus. We are also safeguarding our business to protect the future of Airbus and to ensure we can return to efficient operations once the situation recovers. We have withdrawn our 2020 guidance due to the volatility of the situation. At the same time, we are committed to securing the liquidity of the company at all times through a prudent balance sheet policy. I am convinced that Airbus and the broader aerospace sector will overcome this critical period.”

According to Airbus, with these decisions, the company now has significant liquidity available to cope with additional cash requirements related to the Coronavirus. Liquidity resources previously standing at approximately €20 billion, comprising around €12 billion in financial assets at hand and around €8 billion in undrawn credit lines, were further bolstered by converting an existing €5 billion credit line into a new facility amounting to €15 billion. Airbus’s available liquidity now amounts to approximately €30 billion.

By maintaining production, managing its backlog, supporting its customers and securing financial flexibility for its operations, Airbus intends to secure business continuity for itself, even in the event of a protracted crisis.

Airbus said in an official statement, “Safe and efficient air travel is a key backbone of global economic development and cultural exchange. Airbus therefore highly welcomes governmental efforts around the globe to stabilise this industry by supporting the financial health of its airline customers and its suppliers. Airbus continues to monitor the overall health of the industry.”

Production has resumed at Airbus’s Tianjin final assembly line in China. This facility is Airbus’ third single-aisle production site worldwide, alongside facilities in Hamburg, Germany and Toulouse, France

Airbus has also announced that it expects production and assembly work to partially resume in France and Spain this week, following health and safety checks after the implementation of stringent measures. In addition, the company is supporting efforts globally to tackle the Covid-19 crisis.

Airbus says it has carried out extensive work in coordination with its social partners to ensure the health and safety of its employees, while securing business continuity. The implementation of these measures required a temporary pause in production and assembly activities at its French and Spanish sites for a period of four days. Work stations will only re-open if they comply with the new health and safety measures in terms of hygiene, cleaning and self-distancing, while improving the efficiency of operations under new working conditions.

The same measures are being deployed across all of Airbus’s other sites without full interruption.

For other non-production activities globally, Airbus continues to support home-working where possible, though some employees will be asked to return to support business continuity following the implementation of these new measures. In February, the Airbus Final Assembly Line in Tianjin, China, reopened following a temporary production stoppage related to the coronavirus outbreak and is now operating efficiently.

Airbus is also playing an active role in the fight to control and overcome the Covid-19 pandemic, supporting those in the health, emergency and public services that rely on its aircraft, helicopters, satellites and services to accomplish their critical missions. In addition, the company has donated thousands of face masks to hospitals and public services around Europe and has started to use its test aircraft to obtain larger quantities from suppliers in China. A first flight with a test A330-800 aircraft last weekend transported approximately two million masks from Tianjin back to Europe, of which the large majority will be donated to the Spanish and French authorities. Additional flights are planned to take place over the coming days.

“We are doing all we can to support those on the frontline to fight the Coronavirus and limit its spread. We try to live up to our values, humbled by the complexity of the situation, and contribute as much as we can to society in these very difficult times,” said Faury.

One of the Airbus A330neo test aircraft that landed in Toulouse back from China with ~2M masks from China to support the medical and life-saving teams on the field amid the Covid-19 crisis

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Ever since his first flight on a TriStar, Adam has loved air travel, and since becoming editor of the Aircraft Interiors International brand he has really enjoyed the opportunity to be involved with the latest aircraft and airline products before they are even launched. Adam co-ordinates the running of the magazine, from commissioning articles and artwork, to ensuring that high standards of quality are maintained, as well as managing online content. Adam is proud to sit on the jury of the Crystal Cabin Awards and to have laid on the bed in Etihad's Residence.

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