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    PX1   FR0003500008

CAC 40

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Airbus adds 15 billion euro credit line, scraps dividend

03/23/2020 | 05:34am EDT
FILE PHOTO: An Airbus A220-300 is seen at their facility in Mirabel

Airbus boosted its liquidity with a 15 billion euro (13.9 billion pounds) expanded credit facility on Monday while suspending its 2020 outlook in response to the coronavirus crisis that has grounded much of the global airlines fleet.

The European planemaker also joined U.S. rival Boeing in scrapping its 2019 dividend, worth a total of 1.4 billion euros. It also said it would suspend the voluntary top-up of staff pension schemes.

"These measures are designed to protect the future of Airbus and to ensure we can resume normal business or future business as soon as the situation improves," CEO Guillaume Faury told reporters.

Airbus has not drawn down any credit lines and said it had enough liquidity to cope with the coronavirus with some 30 billion euros worth of liquidity available.

"We have a lot of runway with this 30 billion," Chief Financial Officer Dominik Asam said.

Airbus shares fell 10% versus a wider French CAC40 market index down by around 4%.

Faury called for "strong government help" for airlines across the world that have been forced to ground fleets, as well as for distressed aerospace suppliers.

The French government has offered 300 billion euros of loan guarantees to help companies, but Airbus said its own credit facility was commercial and did not fall under the scheme.

Boeing, already battered by the year-old grounding of its 737 MAX airliner, last week called for $60 billion in U.S. support for the U.S. aerospace sector.

PARTIAL PRODUCTION

Faury said it would become increasingly difficult to deliver jets and some would be stored. Most airlines continue to pay deposits even though many have called for deferrals, he said.

Airbus said it would use customer financing "very selectively" to help distressed airlines and that it expected leasing companies, which are involved in almost half of its deliveries, to play their role as a "shock absorber".

Airbus also said it had identified operational measures to save cash as it resumed partial production at factories in France and Spain after a four-day shutdown.

Airbus, which sources say had been producing 58 single-aisle jets a month before the crisis, declined to say at what rate it would resume output.

Factories have installed extra spacing between workers and shorter shift times to allow for sterilising tools.

Its immediate goal is to maintain parts flowing from a fragile supply chain at a sustainable rate, Faury said.

"We need to stabilise and see from what base we can restart," he told analysts.

Industry executives say shortages are beginning to emerge in the supply chain and some contractors have paused production.

Germany's MTU Aero Engines, which is a supplier to Pratt & Whitney engines used on many Airbus single-aisle jets, said it would halt output for three weeks from March 30.

(Additional reporting by Sudip Kar-Gupta, Christoph Steitz and Laura Marchioro; Editing by Kim Coghill and Jason Neely)

By Matthieu Protard and Tim Hepher


ę Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
AIRBUS SE 0.04% 112.4 Real-time Quote.25.19%
BASE CO., LTD. 3.80% 5460 End-of-day quote.-11.22%
BASE, INC. 1.39% 1828 End-of-day quote.-6.35%
CAC 40 0.24% 6616.35 Real-time Quote.18.90%
JASON CO., LTD. -0.36% 558 End-of-day quote.-16.47%
MAX CO., LTD. -0.66% 1662 End-of-day quote.15.50%
MTU AERO ENGINES AG -1.05% 208 Delayed Quote.-2.53%
SHIFT, INC. 1.69% 16880 End-of-day quote.17.96%
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Chart CAC 40
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Technical analysis trends CAC 40
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Top / Flop CAC 40
TOTALENERGIES SE 40.885 Real-time Quote.1.38%
DASSAULT SYSTÈMES SE 194.45 Real-time Quote.1.12%
VINCI 96.01 Real-time Quote.1.05%
PUBLICIS GROUPE SA 56.48 Real-time Quote.1.04%
VEOLIA ENVIRONNEMENT 26.15 Real-time Quote.0.77%
SAFRAN 123.1 Real-time Quote.-0.44%
PERNOD RICARD 177.35 Real-time Quote.-0.64%
UNIBAIL-RODAMCO-WESTFIELD SE 80.12 Real-time Quote.-0.78%
COMPAGNIE GÉNÉRALE DES ETABLISSEMENTS MICHELIN 129.1 Real-time Quote.-0.96%
ARCELORMITTAL 26.925 Real-time Quote.-1.37%
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