Airbus to cut costs and restructure
Airbus is preparing to launch a cost cutting and restructuring plan in October 2016, as it embarks to digitalize its operations. Previously, Airbus was reported to have a cost-cutting plan due to the losses on its A380 aircraft production.
Tom Enders, Chief Executive of Airbus Group, stated that the plan has not yet been finalized. However, it might result in job cuts within the group’s companies as talks with the unions will be held soon.
Recent confirmation from the company spokesman showed that the European aircraft manufacturer is focusing on a "digitalization project to modernize Europe's largest aerospace group", from design to production and product support.
The spokesman also said that the plan will help the company to achieve the group‘s earnings and cash flow targets for 2017 and beyond.
Airbus was recently reported to have some pressure on making significant cost savings after it announced that €1.4 billion ($1.56 billion) was needed to cover engine problems on its A400M military freighter and supplier delays which affect the deliveries of A350.
At the same time, Airbus has to adjust A380 production which needs more orders. After reaching break-even on each production, at the gross operating level, the company reduced the output from 27 in 2015 to 12 by 2018.
Additional pressure might come due to engine manufacturer Pratt and Whitney, which encounters supply delays of PW1000G components. The PW1000G engine is one of the options for the A320neo aircraft, the second one being CFM International LEAP-1A.
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