Airbus To Begin Cutting Costs

Airbus is expected to implement measures to help cut costs in its business just weeks after announcing plans to lower its delivery forecasts.

The performance improvement plan, as it is being described, has been labelled with the code “LEAD!” This initiative focuses primarily on cost-cutting measures and attempts to freeze its division’s headcount.

According to Reuters, citing a memo seen by staff, there’s much focus on ensuring Airbus is well-positioned for the future.

Furthermore, the initiative will address the difficulties Airbus has experienced internally. While the planemaker is nowhere near experiencing the same struggles as competitor Boeing, it doesn’t mean it’s immune to its niggles.

Airbus customers are also facing delivery delays, and the manufacturer admitted it was behind in producing and delivering the loss-making A220. Moreover, airlines such as Qantas, expecting new aircraft, have announced delays in obtaining their aircraft from Airbus in the last six months.

This new project is being implemented because of factors such as this and Airbus’ admission that it’ll be unable to reach its delivery target for 2024, which was outlined to be 800.

Additionally, Airbus knows at some point that its competitor in the industry, Boeing, will recover when this remains to be seen. With the knowledge that one day Boeing will be a true force to be reckoned with again, Airbus is attempting to sort out its affairs to leave it in the best possible position to compete with Boeing.

Airbus doesn’t want to shake up its business massively, and the initiatives shouldn’t be considered a concerning response but rather a sensible approach to the difficulties in the current operating environment.

The manufacturer said it’ll review its operations from a workforce perspective and set other goals to get it in the best possible shape for the future.

In the long term, the planemaker hopes all new measures will stabilise its supply chain and make the complex operating environment less toxic to its overall business.