Airbus Group SE (EADSF) said it plans to shed 15,000 jobs globally this year to help the planemaker navigate through the aviation crisis caused by the coronavirus pandemic and secure its future.
The European planemaker will cut 5,100 jobs in Germany, 5,000 in France, 900 in Spain, 1,700 in the U.K., and 1,300 elsewhere by the summer of 2021. Another 900 positions planned before the coronavirus outbreak will be cut at the company’s Premium AEROTEC unit in Germany.
The move comes as Airbus is resizing its commercial aircraft activity in response to the COVID-19 crisis, which led to an almost 40% drop in jet business activity.
“Airbus is facing the gravest crisis this industry has ever experienced,” Airbus CEO Guillaume Faury said. “The measures we have taken so far have enabled us to absorb the initial shock of this global pandemic. Now, we must ensure that we can sustain our enterprise and emerge from the crisis as a healthy, global aerospace leader, adjusting to the overwhelming challenges of our customers. To confront that reality, we must now adopt more far-reaching measures.”
Airbus added that it does not expect air traffic to recover to pre-COVID levels before 2023 and potentially as late as 2025.
Last month, the planemaker reported that it did not receive a single plane order in May as the global aviation crisis fueled by the coronavirus pandemic throttled demand for commercial jets.
Airline travel has fallen off a cliff due to coronavirus-induced lockdown restrictions forcing many airlines around the world to ground the majority of their fleets and to sharply reduce spending. This has resulted in a deep cut in the number of commercial jets planemakers’ customers need over the next few years with some asking for delivery delays or order cancellations.
Shares in Airbus have lost more more than 50% of their value this year and were trading down 1.9% at $70.40 as of Tuesday’s close.
Looking ahead, it looks like Wall Street analysts expect some recovery in the shares over the coming year, with the average price target set at $83.15, which reflects 18% upside potential.
Overall, analysts have a cautiously optimistic outlook on the stock. Out of 16 recent reviews, 9 have Buy ratings, 5 Hold ratings and 2 Sell ratings which add up to a Moderate Buy consensus. (See Airbus stock analysis on TipRanks).
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