3,700 Jobs At Risk At Airbus

Reduced demand for some aircraft is now threatening thousands of jobs at European plane maker Airbus (EPA: AIR). The reductions would affect about 3,700 jobs in Germany, France, Spain and the U.K. Airbus said about 10 sites in Europe would be affected, but would not provide further details. Airbus currently has around 130,000 employees

The cuts come as the company announced its plans to cut production of its flagship A380 superjumbo and A400M military transport aircraft. Airbus risks losing money on both without a significant increase in orders.

Last year, Airbus produced 15 A380s. No U.S. carrier has bought the plane. The company now says it will reduce production to six planes a year starting in 2020. Annual production of six planes was described as the minimum at which losses are manageable.

The A400M program has been repeatedly hit by delays and cost overruns. The combined earnings hit from the program has now topped €8 billion. Airbus said it would build 15 of the A400M planes this year, after delivering 19 last year. It plans to build 11 of the planes in 2019, and eight annually thereafter.

The company said that it would try to place most of the affected employees in other positions. Airbus said in a statement, “The company is confident that it will be able to propose opportunities to most of the affected employees through programs which are ramping up.” Airbus will now enter formal negotiations with staff representatives at European and national levels.

Airbus is optimistic that many of the affected employees will be moved to other jobs within the company. Overall strong demand for airliners may mitigate staff cuts. A steady increase in air travel has resulted in Airbus and larger rival Boeing Co. raising output of their most-popular passenger jets. The two companies expect to produce about 1,600 airliners this year.

Last month, Airbus Chief Executive Tom Enders said he was optimistic the company would secure more deals for planes from new and existing customers. Last month, the company secured a $9 billion order for the A380 from Dubai-based Emirates Airlines.

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