* Cuts A350 production to five jets per month
* Hopes to avoid consuming cash in second half
* Has announced job losses as seeks to cut costs
* GPT subsidiary faces corruption charges
(Adds Spain jobs agreement, SFO statement)
By Tim Hepher
PARIS, July 30 (Reuters) - Europe's Airbus
announced a new cut in production of its marquee A350 jet on
Thursday as it swung to a larger-than-expected second-quarter
loss in the face of the global pandemic.
But boosting its shares, which closed up almost 2%, the
planemaker also said it hoped to avoid consuming cash in the
second half of the year after a smaller-than-expected
second-quarter outflow of 4.4 billion euros as deliveries
tumbled due to the coronavirus crisis.
"We believe it is going to be a long and slow recovery,"
Chief Executive Guillaume Faury told reporters, adding that
travel was picking up but more slowly than previously expected.
The crisis has particularly affected demand for wide-body
long-haul jets, which are expected to be the slowest to recover
once demand returns to normal levels, which Airbus says could
take until 2023 or 2025.
Airbus said it had cut wide-body A350 production to five
jets a month, after dropping it to six from 9.5 in April.
The move came a day after U.S. rival Boeing announced
further cuts in output of 787 and 777 jets, which compete with
the A350 on depressed long-haul networks.
Airbus is shedding up to 15,000 jobs or 11% of its workforce
to cope with the crisis, which it expects to hold output down by
40% for some two years compared with pre-crisis levels.
Spain said it had reached an agreement with Airbus to reduce
job losses after a meeting between Faury and Prime Minister
Pedro Sanchez
CASH OBJECTIVE
Airbus posted an adjusted second-quarter operating loss of
1.226 billion euros ($1.44 billion) as revenues slid 55% to
8.317 billion. Analysts saw a loss of 1.027 billion on revenues
of 8.552 billion, according to a company-compiled consensus.
Losses include 900 million euros of balance sheet impairment
charges related to the industry's worst crisis and Airbus warned
it could have to take further provisions of between 1.2 billion
and 1.6 billion euros linked to the restructuring.
Like many companies wrestling with the economic impact of
lockdowns, Airbus suspended formal forecasts earlier this year.
But in what one analyst described as "soft guidance," Faury
said it was the company's "ambition" not to consume cash in the
second half before M&A and customer financing. He declined to
give a breakdown by quarter.
The crisis has been causing cash to evaporate across the
aerospace sector but Airbus said its underlying outflows
remained steady in the second quarter due to aggressive measures
to cut costs, after stripping out a record 3.6-billion-euro
bribery fine to UK, French and U.S. authorities earlier this
year.
Analysts said the report on cash, a key issue for investors
as companies seek to stay afloat, was better than expected.
In a separate probe, Britain's Serious Fraud Office ordered
Airbus unit GPT to appear in court on alleged corruption between
2007 and 2012 over a $3.3 billion contract to provide
communications services for the Saudi National Guard.
Airbus says the case relates to "contractual arrangements"
put in place before it bought the firm in 2007, but which
continued afterwards. GPT ceased operations in April.
The SFO said two individuals had also been charged including
a former head of GPT who was accused of taking commissions on
contracts he awarded to a consultancy while employed by
Britain's defence ministry. A hearing has been set for Sept 14.
(Reporting by Tim Hepher; editing by Keith Weir and Jason Neely
and Kirsten Donovan)
