Airbus's Jet Output Cut Faces Crucial Test

PARIS --- Airbus’s decision to cut output of its best-selling jet by a third amid coronavirus marks a huge shift for the European planemaker, which has enjoyed virtually unbroken growth since it began competing toe-to-toe with Boeing almost 20 years ago.

The company’s first significant cut in A320-family output, to 40 jets a month, brings production to the lowest level since 2012 and will be implemented in May or June, unions said.

Airbus shares, which have fallen around 50% this year due to the crisis, wobbled on Thursday but ended up 2% as several analysts said the company had acted swiftly to reset output.

But with all but a handful of airlines shunning deliveries as they hoard cash to survive the crisis, several industry officials and economists suggested the rate may be optimistic.

“We have too many planes,” said Avitas senior vice-president Adam Pilarski, who has long warned of a jet market bubble - though nothing on the scale of the meltdown in air travel seen since quarantines rippled across the globe last month. (end of excerpt)

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