We take stock of the Coronavirus impact
Every day, newspapers and news channels around the world are filled with updates about how the Coronavirus is affecting us and how businesses are responding globally.
As there is so much news coming out at the moment, we’ve decided to give you a regular brief on the key headlines to help you stay abreast of it all.
Aerospace and defence companies continue to operate but are monitoring the effects of the pandemic and are starting to take decisive action in response to developments.
So far, manufacturers have been making workplace changes to protect employees, making every effort to continue running their factories. Some have taken short breaks to reorganise, clean, and ensure workplaces are safe. But now, widespread lockdowns and supply chain disruptions appear to be slowing down the machine substantially and lengthier production breaks are planned for April at least.
31 Mar Safran, the prime French aircraft engine and systems supplier, calls for aerospace industry to be given substantial long-term loans Le Monde
1 Apr Boeing is considering reductions to build rates of long-haul widebody aircraft (Boeing 787, 777) Bloomberg
2 Apr GE Aviation will furlough half its aero-engine-manufacturing workforce for four weeks Wall Street Journal
2 Apr Rolls-Royce shares are downgraded because half its sales come from the now collapsed long-haul aircraft aftermarket; shares now down 57% in 2020 Proactive Investors
3 Apr BAE Systems expects significant disruptions to business due to Coronavirus even though its defence business markets are not directly affected Lancashire Evening Post
3 Apr One of Boeing's largest customers, leasing company Avolon, cancels orders for 75 737 MAX aircraft Seattle Times
3 Apr The financial support available for aerospace and aviation companies along the supply chain, in the USA, appears to be very significant Aviation Week
4 Apr Airbus now expects significant cuts in production volumes later in 2020, Rolls-Royce has been hit by closure of a key turbine blade supplier in Italy Financial Times
5 Apr The Pentagon will be flexible with defence supply chain companies struggling to meet production targets for military aircraft not only because they are hit directly by Coronavirus but because many will also be hit by the civil aerospace downturn The Motley Fool
5 Apr Instead of the planned return to work following a temporary shutdown, Boeing announces indefinite closure of its Washington state factories (the state, and Boeing itself, have been hard hit by Coronavirus cases) Seattle Times
6 Apr Sales of the long-haul passenger aircraft for which Rolls-Royce makes most of its engines are coming under increasing pressure: Rolls-Royce institutes cuts and plans for reduced volumes Derby Evening Telegraph
6 Apr Projected revenues sharply down, Rolls-Royce introduces big cost savings Financial Times
7 Apr Boeing shuts down 787 production in South Carolina indefinitely, due to coronavirus, new restrictions Charleston Post Courier
7 Apr Airbus plans significant rate reduction on resumption of production Bloomberg
7 Apr Lufthansa slashes twin-aisle fleet and projects it will take years for travel air markets to recover Business Traveller
Reading between the lines of the press and expert commentators covering the aerospace primes, including Airbus, Boeing, GE Aviation, Rolls-Royce and Safran, we’re seeing signs that could suggest output rates on key programmes falling by up to a half of pre-Coronavirus rates.
We will be monitoring the trends closely over the coming weeks and will report key insights regularly.
Update
There have been important new statements even since we published this article. On 8th April Rolls-Royce announced it was to restart production at a reduced rate, and set out a medium-term cost reduction plan including deferral of 10% of all employee salaries for one year. Airbus announced that it will reduce production rates from 60 to 40 for single-aisle aircraft like the A320, and from approximately 15 to 8 for the twin-aisle aircraft A330 and A350.
