Airbus Implements Hiring Freeze and Cost Cuts to Counter Chinese Competition

Airbus is intensifying its cost-cutting measures, including a hiring freeze, to strengthen its competitive edge against the influx of more affordable Chinese airliners. Amidst this heightened competition, Airbus has also revised its delivery projections for the year, decreasing the number from 800 to 770 jets, and has adjusted its operating income expectations downwards.

Facing a robust challenge from the Commercial Aircraft Corporation of China (Comac), which is expanding its footprint in the global market with significant state support and a strong domestic base, Airbus is strategically reducing its operational costs. Comac’s ambitious plans to increase aircraft exports are positioning it as a formidable competitor in the international aviation sector.

In response, Airbus is not only capping job growth and potentially reducing some existing roles but also focusing on enhancing productivity across its operations. Despite these changes, Airbus has clarified that it will not pursue a formal redundancy program.

This strategic pivot comes at a time when Airbus is also grappling with specific supply chain issues affecting engines, aerostructures, and cabin equipment, further influencing its 2024 delivery outlook. As a result, Airbus now anticipates a year-on-year growth of 5%, a decline from the previously expected 9%, with its projected operating income for the year revised to €5.5 billion from the initially forecasted range of €6.5 billion to €7 billion.

Additionally, as Boeing, another key player in the industry, recovers from its recent safety scandals and aims for a strong comeback, the pressure on Airbus to maintain its profit margins continues to mount.