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Boeing, Airbus plan for coronavirus fallout

written by Sandy Milne | March 17, 2020

Boeing is reportedly in talks with the Trump administration over a short-term bailout, sources have told CNBC.

The revelation comes after the President himself seemed to hint he was willing to help in a Tweet referencing the “Chinese Virus”.

Meanwhile, European planemaker Airbus is reportedly slowing production in preparation for a fall in orders over the next few months.

https://twitter.com/realDonaldTrump/status/1239685852093169664

As the health crisis has dried up already weak demand for air travel and aerospace manufacturing, Boeing is already struggling to deal with the grounding of the 737 MAX.

Earlier this month, the company maxed out a US$13.8 billion loan it secured in January to soothe cash flow issues.

The discussions add to requests for government assistance from a host of other US aviation companies.

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According to CNBC reports, requests for state aid from the industry now tally over US$50 billion, split roughly evenly into direct grants and interest-free loans.

However, early indications from congressional lawmakers suggest that government aid would not come without “major strings attached”.

Democratic senator Edward Markey said that “any infusion of money to the airlines must … include new rules to prohibit consumer abuses like unfair change and cancellation fees; protections for frontline workers like flight attendants, pilots, and airport workers; special consideration for our smaller, regional carriers not represented by the major trade associations; and the development of long-term strategies and targets to reduce the carbon footprint of the airline industry”.

Air France took delivery of its first Airbus A350-900 in September. (Airbus)

At the same time, Reuters reported that Toulouse-based aerospace giant Airbus has also drawn up contingency plans for the months ahead.

These involve slowing or stopping production in response to temporary lockdown measures put in place by the French government.

“As we speak, our production facilities are open with strict health and safety protocols following national regulations. We are permanently following the situation and developments in our home production countries,” said one Airbus spokesman.

“We are looking at all kinds of scenarios to maintain business continuity.”

Though Airbus made it clear that a complete halt in production was not expected, the situation in France remains unpredictable at best.

French President Emmanuel Macron recently addressed the nation, asking citizens to remain at home as much as possible over the next 15 days.

Airbus has not yet publicly reacted to the news, and it remains to be seen how this contingency plan will play out in the coming days.

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