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Turbulence in the Aviation Industry: Boeing in Trouble, Airbus Announces Layoffs

AInvestThursday, Oct 17, 2024 4:16 am ET
1min read

The global aviation industry is going through a turbulent time. 

Boeing is grappling with frequent accidents and employee strikes, which have severely affected the company's operations. One might think this would benefit its competitor, Airbus. However, that's not the case. 

Airbus plans to cut up to 2,500 jobs in its defence and space division by mid-2026, according to a statement released on Wednesday. Analysts believe most of the job losses will be managed through retirements or voluntary departures.

"In recent years, the defence and space sector, and our division in particular, have been impacted by a rapidly changing and challenging business environment. Disrupted supply chains, rapid advancements in warfare, and increased cost pressures due to budget constraints have all played a role," said Mike Schoellhorn, CEO of Airbus Defence and Space. The company did not specify which countries would see the job cuts, but they represent about 1.7% of its total workforce.

Airbus has faced €1.5 billion ($1.63 billion) in losses within its space systems division in recent quarters, primarily due to the high-tech OneSat project and delays and cost overruns in its defense sector.

Earlier this year, Airbus announced that supply chain issues had forced it to reduce the number of planes it expects to produce this year and next. The company now forecasts its adjusted earnings before interest and taxes to be around €5.5 billion for the year, down from an earlier estimate of €6.5 to €7 billion.

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