Airbus Intensifies Cost-Cutting Measures and Halts Hiring Amid Boeing’s Recovery and Rising Chinese Competition
In response to the recent resurgence of Boeing and the emerging threat from Chinese aircraft manufacturer COMAC, Airbus is taking significant steps to streamline its operations. Despite Boeing’s recent troubles, including a guilty plea to criminal fraud charges linked to the 737 Max jetliner crashes, Airbus finds itself under intense pressure to maintain its competitive edge.
The European aerospace giant is currently wrestling with a backlog of orders while managing supply chain issues and escalating costs. This situation has prompted Airbus to launch a cost-reduction initiative codenamed “LEAD,” aimed at enhancing performance and addressing productivity challenges without resorting to conventional layoffs. Instead, the plan will involve selective job eliminations and caps on certain positions.
Airbus’s CEO of commercial aircraft, Christian Scherer, communicated these changes in a memo to staff, emphasizing the necessity to focus on the fundamentals amidst ongoing supply chain pressures and a complex economic environment. Despite these challenges, Airbus is committed to maintaining high standards of safety, quality, and compliance.
The company also faces setbacks in its production goals, having recently lowered its annual jet delivery forecast from 800 to 770 and delayed its target of ramping up A320 single-aisle jet production. These adjustments reflect the broader industry’s struggle with parts shortages and operational constraints.
COMAC, supported by significant state funding and domestic success, continues to gain prominence and could disrupt the traditional Airbus-Boeing duopoly if it secures international certification for its C919 plane. Meanwhile, Airbus celebrates a recent victory with United Airlines, which opted for over 30 Airbus A321neo jets over Boeing’s 737 Max 10.
As Airbus navigates these turbulent times, it remains optimistic about future growth and is adjusting its operations to better suit the evolving landscape of the aviation industry.