Airbus chief executive Tom Enders is preparing to launch a new restructuring and cost-cutting plan next month to offset expensive delays to aircraft programmes and minimise losses on the A380 superjumbo.
The restructuring will tighten Mr Enders’s grip on the civil aerospace division which accounts for 70 per cent of the European company’s revenue. He aims to eliminate duplication of certain functions between the aircraft subsidiary and its parent, as well as with other business units.
The plan has not yet been finalised but could include job cuts across the group. Talks with unions are expected to begin soon.
Engine problems
The pressure is on to make significant cost savings after the aircraft maker announced €1.4 billion in charges at the interim stage to cover engine problems on its A400M military transport aircraft and supplier delays that threaten to hold back deliveries of the new A350 wide-body civil jet. The company has also been forced to slash production of its A380 superjumbo, which has struggled to win new orders.
Having just managed to reach break even at gross operating level on the production of each aircraft, the reduction in output from 27 last year to 12 by 2018 will result in new losses.
Mr Enders has promised that this will not be allowed to continue for very long, but Sandy Morris, aerospace analyst at Jefferies, estimates the programme as a whole will have generated losses of €350 million by 2020. – (Copyright The Financial Times Limited 2016)
