Airbus tells employees production rebound unlikely in short term

Airbus SE has told employees that a return to full operations isn’t feasible in the short term because of parts shortages and the inability of struggling airlines to take delivery of new aircraft, according to a person familiar with the matter.

The letter, sent out Friday by Thierry Baril, the planemaker’s chief of human resources, cited supply chains that aren’t fully operational and a drastic drop in aircraft acceptances because of the travel downturn caused by the coronavirus, the person said, asking not be identified as the letter was confidential.

The European planemaker also asked employees to take 10 days of vacation between now and mid-May, so it can meet demand once business resumes, the people said.

An Airbus spokesman confirmed the company has reached agreement with worker representatives to implement a two-week holiday in France, and said a similar accord is being finalized in Germany.

The Toulouse, France-based compnay temporarily closed plants in Europe last month and has been reopening them at a slower pace. It said in a statement Friday that it’s “in the process of assessing the implications of the pandemic on its operations and the potential mitigation measures that could be implemented.”

Airlines around the world are trying to hang, guarding cash as fleets are grounded and revenue withers. The industry will burn through as much as $61 billion in the second quarter, according to the International Air Transport Association, with revenue set to plummet by 68%. As a result, carriers are holding off taking deliveries of new aircraft and pausing capital investments like planes.

Engine-maker Rolls-Royce Holdings Plc, a supplier to Airbus wide-body planes, scrapped its outlook for 2020 on Monday. Last month it said it would significantly reduce all but essential activities at its U.K. civil aerospace facilities because of the coronavirus outbreak.

Discount carrier EasyJet Plc, meanwhile, is among the airlines seeking to stretch out deliveries, while its biggest shareholder is mounting a campaign for the U.K. company to cancel a 4.5 billion-pound ($5.5 billion) order for Airbus narrow-body jets.