Airbus CEO tells managers he seeks job-cut deals by early summer

Airbus SE Chief Executive Officer Guillaume Faury has told senior managers the European planemaker must “act fast” to slash jobs as it confronts the sharpest downturn ever in the aviation industry.

The world’s largest commercial aircraft manufacturer aims to secure union agreements on cutbacks by early summer, Faury said Thursday in the video-conferenced meeting, people familiar with the matter said. Airbus requires “proactive, radical and rapid action” to stem cash outflows that the CEO has called a threat to the company’s survival, the people said.

Faury is rousing the troops as the Toulouse, France-based planemaker prepares for permanent job cuts after demand for new aircraft suddenly evaporated because of the coronavirus crisis. Fighting the disease has cut drastically into air travel, forcing airlines to park planes and defer deliveries as they seek bailouts to remain solvent.

Discussions have begun with labor groups in Germany, France and Spain, people familiar with the matter said Wednesday, with the formal process expected to start next week. The number of positions to be eliminated hasn’t yet been decided, according to the people, who asked not to be named disclosing private information.

Airbus declined to comment on internal communications. The company said Wednesday it “will continue to take all necessary measures to ensure the future of Airbus in cooperation with its social partners.”

Read more: Airbus to Cut Jobs After Virus Shatters Demand for New Jets

In the address, Faury dismissed a report that 10,000 jobs were at stake as speculation, though he didn’t give an alternative figure, the person said. The company has about 134,000 employees worldwide.

Faury said he doesn’t expect an aerospace recovery until 2023, with the market for wide-body planes typically used for long-distance routes of particular concern.

Airbus executives will thrash out an initial plan on a call next week, the people said Wednesday. It may take months to arrive at a final figure for redundancies, which will depend on the depth of the aerospace downturn and negotiations with labor unions. The process will also include office staff at the planemaker’s headquarters in Toulouse, France, they said.

“The prospect of job losses across the aerospace industry has been rumbling around now for at least a month,” said Sandy Morris, an analyst at Jefferies. “Aircraft deliveries cannot come down by 35% without there being consequences.”