Airbus bolsters business against COVID-19 impact
In response to the COVID-19 pandemic, Airbus has introduced measures to bolster its liquidity and balance sheet, as it continues to assess the ongoing situation and the impact on its business, customers, suppliers and the industry as a whole.
Copyright Airbus
Airbus Chief Executive Officer Guillaume Faury said: “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 We have withdrawn our 2020 guidance due to the volatility of the situation.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.”
Reflecting the Company’s prudent balance sheet policy and to ensure financial flexibility, Airbus’ management has received approval from the Board of Directors to: secure a new credit facility amounting to €15 billion in addition to the existing €3 billion revolving credit facility; withdraw the 2019 dividend proposal of €1.80 per share with an overall cash value of approximately €1.4 billion; and suspend the voluntary top up in pension funding. Given the limited visibility due to the evolving COVID-19 situation, the 2020 guidance is withdrawn. Operational scenarios, including measures to minimise cash requirements, have been identified and will be activated depending on the further development of the pandemic.
With these decisions, the Company 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. Available liquidity now amounts to approximately €30 billion.
By maintaining production, managing its resilient backlog, supporting its customers and securing financial flexibility for its operations, Airbus intends to secure business continuity for itself even in a protracted crisis. 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.
Airbus has convened its 2020 Annual General Meeting in Amsterdam on 16th April. Due to the global outbreak of COVID-19, Airbus discourages physical attendance and strongly encourages shareholders to vote by proxy in line with public health and safety measures.
Airbus also announced that it expects production and assembly work to partially resume in France and Spain today, 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 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 the 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 other sites without full interruption.
For other non-production activities globally, Airbus continues to support home-working where possible. 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 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, in the past days, 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 has this weekend transported approximately 2 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 in the coming days.
“Health and safety is our number one priority at Airbus so the work stations at our sites in France and Spain will only re-open if they meet the required standards. I’d like to salute the strong commitment from our employees to ensure business continuity in close cooperation with our social partners and other stakeholders. At the same time 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 Airbus Chief Executive Officer Guillaume Faury.
Airbus is committed to ensuring the health and safety of its people while maintaining delivery capability for its products and services to its customers.