With international and domestic travel put to a halt, airlines are forced to park their aircraft to avoid incurring fees and costs without getting a return, as load factors on jets have plummeted. Subsequently, airlines do not need the extra capacity that new aircraft would bring.
Thus, one of the members of the aircraft manufacturer duopoly, Airbus, had to react to the changes in the market. While the European planemaker managed to net 21 orders for commercial aircraft during March 2020, deliveries have slowed: Airbus handed off 55 aircraft to customers in February, while in March 2020, the company delivered 36 jets.
The company was more than capable of delivering more, as Airbus produced 60 aircraft in Q1 2020. However, a worsening financial situation for airlines globally has resulted in customers asking to defer aircraft deliveries to weather the storm. Airbus Chief Executive Officer Guillaume Faury noted that the manufacturer’s customers are “heavily impacted by the COVID-19 crisis,” thus the company was forced to adapt its production to the new reality that the industry currently faces.
As a result, Airbus slashed its monthly production rates. While the company still has a backlog of 7,650 aircraft as of March 31, 2020, the Toulouse-based plane maker cut aircraft production by a third. Going forward, the company will produce 40 Airbus A320 aircraft, two A330 jets and six A350s per month. Prior to the crisis, Airbus manufactured 60, 3.3 and 10 jets, respectively.
Previously, the company indicated it would temporarily suspend all production at several sites. Airbus’ facilities in Germany, namely in Bremen and in Stade will be paused from April 6 till April 27 and from April 5 till April 11, 2020, respectively. In Mobile, Alabama, where the A220 and the A320 are produced, work is suspended until April 29, 2020.
