“COVID-19 Adaptation Plan”
CEO Guillaume Faury announced a “COVID-19 adaptation plan” including a cut of 15,000 positions.
“Airbus is facing the gravest crisis this industry has ever experienced. Our business in the civil airliner business has reduced with 40%, and we expect this to remain the level for the next two years. Then, in 2022 we think there will be an uptake in single-aisle business. Widebody deliveries will take longer to recover, perhaps until 2025. Today’s announcement is our longer-term adaptation to the lower demand. There is no further adaptation of our announced production rates because of this. Our initial estimate from April was pretty good. It took single-aisle from rate 60 to 40, A350 from 9.5 to six, and A330 from 3.5 to two. We expect this to be the level for the coming months. Airbus is always adjusting the rates to the actual situation, so there will be smaller adjustments going forward, but these are the levels we work from.”
Era of Jumbo Jets is Over
In the US, Boeing Quietly Pulls Plug on the 747, Closing Era of Jumbo Jets.
Boeing Co. hasn’t told employees, but the company is pulling the plug on its hulking 747 jumbo jet, ending a half-century run for the twin-aisle pioneer.
The last 747-8 will roll out of a Seattle-area factory in about two years, a decision that hasn’t been reported but can be teased out from subtle wording changes in financial statements, people familiar with the matter said.
“At a build rate of half an airplane per month, the 747-8 program has more than two years of production ahead of it in order to fulfill our current customer commitments. We will continue to make the right decisions to keep the production line healthy and meet customer needs,” Boeing said for this story.
Airbus is already preparing to build the last A380 jumbo, after the final convoy of fuselage segments rumbled to its Toulouse, France, plant last month.
Air France, Lufthansa, and Qatar Airways are among carriers weighing whether to ground their A380s permanently or are preparing to do so. Airbus has just nine of the planes still be delivered.
The Recovery Will Have Many Shapes, Not One
Boeing is an excellent example of why The Recovery Will Have Many Shapes, Not One.
Also see Unemployment is Much Worse Than it Looks.
Fed Chair Jerome Powell promotes the idea that a Quickening Takes Many Years.
Regarding Boeing, my industry contact commented “Boeing only has the 737 MAX in the single aisle category . If wide bodies take till 2025 to recover, their 787 and 777 X planes are in trouble.”
Mish
Mish; a few correction are needed here. The B747-800 was launched 15 years ago, which is a very very long time ago in this business, especially since it was mostly a variant of the type, and not a new design. As for the A380/A350 aircraft (really one platform) the type (especially for the A380) have been in trouble long before covid19. In fact, two years ago, Singapore airline scraped its first A380 because it could not find a buyer. The A330 is also a very old aircraft — going back to the late 90s with very little changes to the type.
What Covid has done is the exact opposite of what happened after 9/11 — where international flights (hence large aircraft) took to the skies first. Here the exact opposite is happening.
Long haul flights are dead(er) and short haul (domestic) flights will dominate!
Boeing and Airbus better start working on that flying car the Jetsons would love to see in their driveway.
They won’t. What they will do, is work on empty promises about all the great flying cars they are going to make in the future.
That’s what they are in the business of selling these days. Not actual things, as those require above-ostrich competence to build. And, empty promises is also all that the idiots The Fed handed all funds to buy anything with, are buying.
The 747 is a great plane, will be sad to see it go. Earlier, if you went to an airport there were planes, and then there was the 747. Concorde was something also. A380, well we hardly knew ya, I guess size alone is not exactly inspiring.
Both the 747 and the Concord was from an era prior to Nixon opening the floodgates completely to unconstrained robbing of the competent, by idle halfwits in “financial centers” and two-bit bucktoothed monkeys “making money off their home.”
Peak West, if you wish. Moonlandings, a new world shattering jetliner, which is still top of their class, every few years, Microchips, Darpanet/internet, communication satellites etc., etc.
It takes a fair amount of competence to put stuff like that together. Lots more than changing the “look” of a kitchen counter back and forth every few years, while mindlessly printing Washington’s face, and empty, clueless promises of unearned greatness on pieces of paper, in fact.
Hence, that stuff was for a different era. Now, we make money of our homes as they decay. And die from “new, improved” planes falling out of the sky. As well as from diseases even communist five year planners are able to contain.
Airplanes can last an extremely long time. If this recession turns into a depression aerospace industry could find itself in a situation where supply can greatly outnumber demand.
Well, if the “climate change” crowd has their way, then at least some of these people will be re-employed in buggy whip factories.
Sounds like animal abuse, the ‘buggy whip’ part…
It’s a kind of ice cream, like chocolate ants ?
Regarding headline numbers of layoffs — COVID-19 has given the opportunity to companies to clean up their balance sheet (with no impact to stock price) and also to reduce the median age of employees. Once they get rid of the 15,000 people (most older) they will be ready to hire younger people at lower wages, plus depend more on labor in countries where it is cheaper to hire. Without the pretext of COVID-19 they would not be able to clean up their balance sheet, or do such a massive renewal of their workforce, without a huge backlash.
The aerospace industry does not lend itself to a distribution of labor skewed to the youth. The industry is so bureaucratic that older employees have a distinct advantage navigating regulatory hurdles. And just hiring people with 10 – 20 years of experience still entails a huge learning curve to navigate paperwork and processes. My company offered buyouts 2 years ago, and then hired young people aggressively. The results have not met profit / sales expectations because rework is expensive.
Do the bean counters have the ability to draw that connection? I highly doubt it.
The bean counters don’t care. They don’t even have the basic aptitude to have any hope of understanding why they should care, nor what they should care about, anymore.
What matters to them, is whether they can sell more paper to people on Fed Welfare. Which is much more dependent on how much welfare The Fed doles out to idiots on welfare, than on anything anyone at some once-was productive company could do.
We make money off of our decaying homes and decaying planes from the 60s now. Anything more complimecated than that, is beyond us.
No, and that’s why you should not fly.
Let’s revisit this in 2030.
I think you are way too pessimistic.
In Europe and Asia, trains have been eating into traditional single-aisle use cases since at least 9/11. The added security measures, and moves to centralized airports further from where people live, have made ever faster city-center to city-center rail transport more competitive.
In aggregate, this development have been masked by more countries and regions getting wealthy enough to join the jet age. But eventually, you do run out of new, low hanging virgin markets. And have to start worrying about more efficiently serving already existing ones.
Next step, is limited autonomy individual vehicles compatible with fast, dedicated medium to long haul infrastructures. Being stuffed like sardines into a viral exchange tube, just to get somewhere where one can waste away standing densepacked and coughed at in a car rental lane, was getting long even before covid. Now it’s even less palatable.
And while truly autonomous vehicles are, and will remain, as much a children’s fairytales as ever; dedicated, segregated long haul infrastructures capable of moving vehicles autonomously across them, aren’t nearly as pie-in-the-sky.
Log your car sized packet onto an interconnected “packet switched” “network” in New York, go to sleep and be awoken a few minutes before you are punted off in Chicago… Or, more likely the way the world is going, substitute Beijing and Shanghai.
You’re still in your own “pod.” No worries about whether the guy who rented the car before you had some hitherto unknown plague he smeared across every touchable surface of the car. You have all the stuff with you in your car that you are used to having, without needless packing, forgetting, unpacking and scrambling to replace at every destination. And, at least in Shanghai, the planners can follow outsiders around easier. As well as make sure you “tested negative” for something-or-other, before allowing you to be punted off in their neck of the woods.
100% agree.@Mish was pessimistic coming out of the GFC as well and way underestimated the recovery. I think the problem with @Mish and most bears is that they think somehow that the fed and the government will be held responsible for their actions and that there will be a “day of reckoning” of sorts. But that will never happen–they will never acknowledge their mistake. If we focus on that thought, we are only hurting ourselves because the fed and the government will take actions that lead to us getting screwed even more. We might as well make the most of the situation just like people we might consider ignorant already do.
To 99.999% of people, the economy was doing GREAT before COVID-19 hit.
No way was the economy wonderful for everyone before Covid-19. People and their governments are more in debt than ever before and inequality was already widening rapidly prior to this round of massive Fed intervention.
While the Fed can monetize to the moon and back with no one to stop them, eventually the social costs of doing so will catch up to us as more people fall through the cracks.
You’re basically arguing that we can print our way to prosperity, which is lunacy.
Tell that to students with huge debts, people bankrupted by medical debts, etc. Don’t forget, before Covid, a bunch of retailers were already headed towards bankruptcy. Malls also had seen their heydays. The ones having fun seem to be those invested in the stock market like yourself. Well I was invested too, to be fair, but not now.
“To 99.999% of people, the economy was doing GREAT before COVID-19 hit.”
That’s why we had riots a month ago. Huge street parties celebrating how “great” people are doing…. By the size of the parties, People are doing almost as “great” as the food rioters in Venezuela!!
Not to mention the whole ecosystem supplying Boeing from fasteners to flight control elements & engines.
The aerospace-industrial complex will be hit just like the autmotive-industrial.
Only the military-industrial is likely to plough on as before with its relevant section of aerospace being OK.