Amid this COVID-19 chaos, it is apparent both Boeing and Airbus are trying every trick in the book to keep airplanes moving and their industrial ecosystems alive. More than a dozen interviews by The Air Current with senior leaders at airlines, plane makers, lessors and suppliers around the world reveal a host of short and longer-term efforts at moving airplanes to buyers. All this at a time for most airlines and lessors, taking delivery of a new airplane looks more like a burden than a blessing.
“The vast majority of their revenues have been put down to zero and most of them are fighting for their survival and fighting for short term ways of securing their balance sheet, their cash positions and being able to navigate through their next weeks and months,” Airbus CEO Guillaume Faury said of the company’s customers in a recent call with the media.
In slashing its production plans by a third on April 8, Faury said, “What we are doing in terms of rate reflects the blending of the very diverse situations around the world.” The conversations have been “very granular” in trying to understand the financial positions of its customers and how many airplanes the company should be building. Airbus was left with 60 unclaimed aircraft at the end of the first quarter, some of which it is now trying to re-sell. The surge in deferrals has forced Airbus to scale back A350 output from 10 to 6 per month, A330s from three to two and A320 production from 60 down to 40.
For both Boeing and Airbus, near term strategies are geared around an “exchange of short term deliveries against long term relief,” said Henri Courpron, chairman of Plane View Partners consultancy. The goals, he told TAC, are aimed at clearing the inventory of aircraft in the production system, which is holding onto billions of dollars in working capital.
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