With Over $32B In Liquidity, Airbus Confirms It Will Power Through Coronavirus Crisis

Airbus announced its plans to power through the coronavirus crisis, confirming that it will have over €30 billion ($32 billion) in liquidity to sustain its production.

The company’s access to capital includes €12 billion ($12.8 billion) in financial assets at hand and approximately €8 billion ($8.5 billion) in undrawn credit lines, further bolstered by Airbus converting an existing €5 billion ($5.34 billion) credit line into a new facility worth up to €15 billion ($16 billion).

The company also announced during the weekend that it would partially resume its production at its facilities in France and Spain which had been closed last week to implement new health and safety measures as part of the effort to contain the spread of coronavirus.

“Our first priority is protecting people while supporting efforts globally to curb the spread of the coronavirus,” said Airbus Chief Executive Officer Guillaume Faury. “We are also safeguarding our business to protect the future of Airbus and to ensure we can return to efficient operations once the situation recovers. We have withdrawn our 2020 guidance due to the volatility of the situation. At the same time, we are committed to securing the liquidity of the company at all times through a prudent balance sheet policy. I am convinced that Airbus and the broader aerospace sector will overcome this critical period.”

Airbus will enact measures to retain cash including withdrawing planned 2019 dividend of € 1.80 ($1.92) per share, which will preserve approximately € 1.4 billion ($2 billion), suspending the voluntary top up in pension funding. It has identified other ways to preserve cash and continue to operate under various possible scenarios depending on the scope of the pandemic. The company also withdrew is 2020 guidance due to market uncertainty.

Airbus also called on governments to support the critical economic engine of aviation by supporting airlines and their suppliers to ensure rapid global recovery from the current crisis. The company’s planned Annual General Meeting will be held in Amsterdam on April 16, but Airbus has asked shareholders to consider public health measures and vote by proxy rather than attending in person.

Boeing asked the U.S. government for a bail out of $60 billion on Tuesday, to ensure that it would be able to keep up production and support its employees and supply chain during this period. The request led Nikki Haley to resign from her seat on the Board on Friday.

“While I know cash is tight, that is equally true for numerous other industries and for millions of small businesses,” Haley wrote in her letter of resignation. “I cannot support a move to lean on the federal government for a stimulus or bailout that prioritizes our company over others and relies on taxpayers to guarantee our financial position. I have long held strong convictions that this is not the role of government.”

Boeing also announced on Friday that CEO Dave Calhoun and Board Chairman Larry Kellner would forgo their salaries until the end of the year. The company will suspend its dividend indefinitely, and extend the halt of its stock buyback program, which the company stopped in April of 2019, until further notice.

“Boeing is drawing on all of its resources to sustain operations, support its workforce and customers, and maintain supply chain continuity through the COVID-19 crisis and for the long term,” the company said in a statement.