PARIS: Airbus' decision to cut output of its best-selling jet by a third amid coronavirus marks a huge shift for the European planemaker, which ...
PARIS: Airbus' decision to cut output of its best-selling jet by a third amid coronavirus marks a huge shift for the European planemaker, which has enjoyed virtually unbroken growth since it began competing toe-to-toe with Boeing almost 20 years ago.
"We have too many planes," said Avitas senior vice-president Adam Pilarski, who has long warned of a jet market bubble - though nothing on the scale of the meltdown in air travel seen since quarantines rippled across the globe last month. That contrasts with 2001 when Boeing cut output sharply after 9/11 attacks, while Airbus - reluctant then as now to cut output due to rigid European labour laws - spotted an opening with upstart budget carriers and went on a selling spree.
Airbus"will have to share the pain with Boeing," Agency Partners analyst Sash Tusa said in a recent note.To defend its new output rate, experts said Airbus appeared to be banking on a sharp increase in retirements of older jets, echoing moves seen after 9/11 and the 2008 financial crisis. Other tools used in past crises include pressure on leasing companies to take delivery. They place large speculative orders for good prices and are expected to pull their weight in a downturn - but they too are reeling as airlines hand back jets.
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