Airbus lifts liquidity to $32b on coronavirus

Bloomberg

Airbus SE withheld its dividend and extended credit lines, lifting liquidity about 50% to 30 billion euros ($32 billion) after the coronavirus pandemic pushed its airline customers to halt flights and stop ordering planes.
The European manufacturer also tore up earnings guidance for the year in an announcement on Monday and said its vast supplier network is in dire need of government support, though the company itself isn’t yet seeking a bailout.
The global aviation industry has been among sectors hit hardest by the health crisis, with airlines pushing back against taking existing deliveries, let alone purchasing extra jets. Airbus plans to continue production for the moment but said the wide-body market in particular will be depressed and that “operational scenarios” could be activated depending on the virus’s spread.
“These are indeed exceptional times,” CEO Guillaume Faury said on a conference call, adding that the extra funding is aimed at “safeguarding our business to protect the future of Airbus and to ensure we can return to efficient operations once the situation recovers.”
Making deliveries is getting increasingly difficult and the company is looking at possibilities for storing finished aircraft, according to the CEO, who said there should be a return to a higher number of handovers sometime in the second half. He said he couldn’t be specific about future build rates.
Airbus shares fell as much as 14% and were trading almost 11% lower at 56.96 euros as of 9:21 am in Paris, taking the stock’s decline this year to 56% and valuing the company at
45 billion euros. Airbus canned a shareholder dividend that would have cost it 1.4 billion euros and has also converted a credit facility of about 5 billion euros into a new line amounting to 15 billion euros.
The Toulouse, France-based company, which has an existing 3 billion-euro credit and a further 12 billion euros in financial assets, will also suspend a top-up in pension funding.