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Airbus In Negotiation With French Government But No Immediate Liquidity Issues, Says CEO

Airbus In Negotiation With French Government But No Immediate Liquidity Issues, Says CEO
While claiming that there is currently no liquidity problem at the European plane maker Airbus, the company’s Chief Executive Guillaume Faury gas has said that the company is in talks with the French state about any potential support for aircraft deliveries.
“In crises of such importance, and crises which are as global as this, one needs states to help. States have an absolutely essential role to play,” Faury said. “We are holding very frequent discussions. The state is very willing to listen, and is very understanding of our position,” Faury added.
A 15-billion-euro expanded credit facility was availed last month by Airbus to boost its liquidity.
“We are no longer in a problem of liquidity but one of adapting to the situation,” Faury said. “What we need to survive is to have a certain number of deliveries of aircraft. So the first priority is to get traffic moving and help airlines who have been impacted in a very brutal and severe fashion to survive and resume their activities,” he added.
Airbus currently requires export financing support, said Faury who had informed the company’s staff last week that the survival of the company would be in question if no immediate action was taken.
When the 2009 financial crisis hit the company, it was able to continue with deliveries with the help of export credit agencies that played a key role in that business aspect. However during the recent years, its role has diminished. Further, when the company was embroiled a four-year corruption investigation that ended with in a record 3.6-billion-euro fine against Airbus in January, the support was withdrawn by European nations.
Last year, the scheme was again revised on a case-by-case basis but the volumes of activity were relatively low in the recent past.
If the need comes, the French government was ready to provide “massive” support to Airbus, French Finance Minister Bruno Le Maire said earlier this week.
But even as the plane maker posted sharply lower first-quarter profits, Airbus said on Wednesday that no immediate need for further government support was needed by it.
Faury also said that in order to reduce cash burning, Airbus has already reduced production, implemented furloughs and cut back on spending for future projects. However the company is exposed to further problems facing the wider industry because of the novel coronavirus pandemic which has virtually stopped passenger traffic.
This week, Airbus implemented the furlough for 3,200 of its workers in Britain following a similar move involving another batch of 3,000 employees and putting them on government-backed partial unemployment schemes in France. The company has also indicated that the scheme will also be implemented in Germany.
While not ruling out mandatory job cuts, Airbus said that it will review the situation again in June this year to take stock of the direction that the health crisis as well as the associated economic crisis was moving before taking further steps. 

Christopher J. Mitchell

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