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UPDATE 2-Airbus CEO warns of compulsory layoffs as airline crisis deepens

Mon, 14th Sep 2020 14:17

(Adds quotes, union reaction, air travel background)

By Johanna Decorse and Tim Hepher

TOULOUSE, France, Sept 14 (Reuters) - Airbus has
stepped up warnings of compulsory layoffs as air travel fails to
recover as quickly as expected from the coronavirus crisis,
putting itself on a potential collision course with unions and
the French government.

The warning in a letter to its 130,000 staff from Chief
Executive Guillaume Faury, seen by Reuters, marks a more
pessimistic tone from the planemaker, which had previously said
only that it could not rule out compulsory measures.

"I owe it to you to be transparent: it's unlikely that
voluntary departures will be enough," Faury wrote in the letter
distributed on Friday evening.

Unions and the French government have urged the
Toulouse-based planemaker to avoid compulsory layoffs as it
sheds up to 15,000 posts to cope with plummeting travel demand.

Airbus has repeatedly warned that the outlook is uncertain
as the industry's worst crisis hits aircraft deliveries and
severely weakens airline finances.

But a disappointing rise in air travel over the summer has
cast a fresh pall over the company's biggest ever restructuring
plans.

"Unfortunately, the recovery in airline traffic over the
summer period has not been at the level the industry was
counting on," Faury wrote.

"We must now prepare for a crisis that will probably be even
deeper and longer than the previous scenarios suggested".

The group representing most of the world's airlines, the
International Air Transport Association, said last week that air
traffic had failed to recover as quickly as expected during
July, a key part of the peak season for airline revenues.

July traffic was down 80% compared with the same month of
2019, compared with a 94% drop at the low point in April.

IATA says inconsistent border rules are hampering the
recovery, making it difficult for airlines to plan ahead.

Airbus reported solid deliveries for August, but industry
sources say many aircraft are going straight into storage.

An Airbus spokesman confirmed that Faury had issued a
"general business update" to staff.

"This is part of the constant dialogue between Airbus’ top
management and employees, which is crucial in these challenging
times in order to ensure transparency and share information with
our global workforce," the spokesman said by email.

He declined further comment.

An official with France's CGT union accused Airbus of
deliberately stoking up staff anxieties ahead of further labour
negotiations starting in one week.

Airbus has so far launched an internal call for voluntary
departures and early retirements, in a scheme expected to run
until the end of the year.
(Reporting by Johanna Decorse; Writing by Tim Hepher; Editing
by Jason Neely, Alexander Smith and Jan Harvey)

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