Airbus warns of 'gravest crisis' as Covid-19 hits results

Airbus said the aerospace industry faced the 'gravest crisis' in its history as the airplane maker reported first-quarter figures hit by the early effects of the Covid-19 emergency.

Consolidated adjusted earnings before interest and tax almost halved to €281m (£245m) in the three months to the end of March from €549m a year earlier. Revenue fell to €10.6bn from €12.5bn.

Within group earnings, Airbus's earnings plunged to €191m from €463m as it delivered 40 fewer commercial aircraft because of the Covid-19 crisis.

"We saw a solid start to the year both commercially and industrially but we are quickly seeing the impact of the Covid-19 pandemic coming through in the numbers," Airbus Chief Executive Officer Guillaume Faury said. "We are now in the midst of the gravest crisis the aerospace industry has ever known."

Faury joined International Airlines Group in warning about the dire consequences of the Covid-19 crisis for air travel. IAG said on Tuesday it was considering cutting 12,000 jobs at its British Airways business with a recovery in international air traffic not expected for several years.

The group shed €8bn of cash in the first quarter, including €3.6bn of penalties to settle bribery and corruption investigations into its use of middle men to win sales. Airbus's net cash position at the end of March was €3.6bn, down from €12.5bn at the end of December.

Airbus has taken drastic action to prop up its finances during the crisis, which has grounded airline fleets and cast doubt about the future of aviation. It arranged €15bn of new credit, withdrew its dividend, issued a €2.5bn bond and delayed a pension scheme top-up.

Faury said: "We kicked off early by bolstering available liquidity to support financial flexibility. We're adapting commercial aircraft production rates in line with customer demand and concentrating on cash containment and our longer-term cost structure to ensure we can return to normal operations once the situation improves."