One of the worst hit industries in the ongoing pandemic has been air travel, with airlines parking their planes globally in the hope that one day in the not too distant future they will be back in the air. With airlines' appetite for new planes all but disappeared, leading to extreme pressure on their balance sheets, both Boeing and Airbus are having to make sharp cuts to their output, lay off staff and cut R&D costs. In the second quarter alone the 2 companies burned through nearly USD11bn in cash.
At the moment there is no light at the end of the tunnel. The biggest problem that both plane makers have is trying to get airlines to honour contracts for planes they now do not need or cannot afford. It’s a catch 22 scenario for them, if they push too hard, they could further force airlines to the brink, however if they do not start selling planes they will continue to burn cash at a phenomenal rate. As Guillaume Faury, Airbus Chief Executive Officer puts it ‘It’s more about finding ways to deal with the situation together’.
As of the end of June, Airbus had nearly 150 finished jets awaiting delivery. However, this is small fry compared to Boeing, who have 450 737 Max jets alone pending delivery once they are cleared to fly again. In the second quarter of 2019, Boeing delivered 90 planes to airlines, this year that figure was 20, the lowest quarterly total since 1963. Not that things got any better in July, with Boeing delivering just 4 planes. Airbus did slightly better with 74 jets delivered, but again a huge decline from the 227 it delivered in the same period last year.