Shares of Airbus SE (EPA: AIR) plunged a further 2% today to total weekly losses to nearly 10% as the number of daily COVID-19 infections is on the up again.
Fundamental analysis: Further cuts possibleGuillaume Faury, the CEO of the European multinational planemaker Airbus, said his company will do everything it can to avoid compulsory layoffs, but there are no guarantees it won’t happen.
Given that air travel is far lower than its normal levels because of travel restrictions and coronavirus-induced fears among tourists, airline companies have eased their new aircraft deliveries.
“The crisis is existential. Our life as a business is potentially at risk if we don’t take the right measures. We are taking them,” Faury said.
Airbus said it has already cut 15,000 jobs on a global level.
Faury today said that voluntary layoffs may be insufficient to reach the company’s goal. Faury added the company will do its best to avoid compulsory redundancies but there are no guarantees they won’t happen in order to reduce costs.
Airbus plans to reduce its production by as much as 40% over the next two years to compensate for the blows it took from the epidemic.
“The situation is so serious, and we are faced with so much uncertainty, that I think no one can guarantee there won’t be compulsory redundancies if we’re to adapt to the situation, especially if it evolves further.”
“On the other hand, what I say clearly is that we have a lot of work to do, we will do everything we can to avoid arriving at that point,” he told the radio station.
The CEO also said that the company is able to take a number of measures that fall somewhere in between the voluntary redundancies and compulsory redundancies.
Technical analysis: Shares tumbleAirbus stock price fell around 2% today as the European equities trade in the red. This way, shares extended yesterday’s losses after Airbus share price closed 6.57% lower. Therefore, the last month’s range of 67 euros per share to 75 euros has been broken.
Airbus stock daily chart (TradingView) Yesterday’s close also pushed the stock below 65.80 where the 200-DMA is located. This is likely to generate additional pressure on the AIR stock in the coming days and weeks. The next target on the downside is the 60.00 mark.
SummaryEuropean aerospace company Airbus said it will do its best to avoid compulsory redundancies but it can’t promise that they won’t happen if other measures turn out to be insufficient to cut costs. Shares trade nearly 20% lower.
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