Airbus receives board approval for new credit facility worth €15bn
The European plane maker is also dropping the 2019 dividend proposal of €1.80 per share
Airbus has won approval from its board to secure a new €15 billion (Dh59.1bn) credit facility to boost its liquidity position in order to deal with the economic fallout from the coronavirus outbreak.
The latest amount will be in addition to an existing €3bn revolving credit facility, the company said on Monday.
“Our first priority is protecting people while supporting efforts globally to curb the spread of the coronavirus. We are also safeguarding our business to protect the future of Airbus and to ensure we can return to efficient operations once the situation recovers,” Airbus chief executive Guillaume Faury said.
“We have withdrawn our 2020 guidance due to the volatility of the situation. At the same time, we are committed to securing the liquidity of the company at all times through a prudent balance sheet policy. I am convinced that Airbus and the broader aerospace sector will overcome this critical period,” Mr Faury said.
The plane maker is also dropping the 2019 dividend proposal of €1.80 per share, which has an overall cash value of approximately €1.4bn. It will also suspend the voluntary top up in pension funding to preserve liquidity as the virus pandemic hits the aviation sector.
“With these decisions, the company has significant liquidity available to cope with additional cash requirements related to the coronavirus,” Airbus said. The planemaker’s available liquidity now amounts to approximately €30bn.
Covid-19, the biggest health challenge to the global economy since the 2008 financial crisis, has disrupted trade, halted global travel and rattled investors.
The outbreak, which began in China, has now engulfed Europe and North America. Covid-19 has infected about 342, 000 people and killed nearly 15,000. Although 99,000 people have also recovered, according to Johns Hopkins University which is tracking the outbreak.
The pandemic has particularly affected the airline industry, as air travel ground to a halt after countries enforced lock down to curb the spread of the virus.
Earlier this month, the International Air Transport Association warned global airlines will lose $63bn to $113bn in passenger revenue this year.
Airbus said it intends to secure business continuity “even in a protracted crisis,” by maintaining production and managing its backlog. It also welcomed governmental efforts around the world to stabilise the airline industry.
Separately, the French plane manufacturer said its production and assembly operations in France and Spain are expected to partially resume on Monday, following health and safety checks.
In February, the company also reopened its final assembly line in Tianjin, China, after a temporary production halt due to the coronavirus outbreak.
In the past days, Airbus has donated thousands of face masks to hospitals and public services around Europe and has started to use its test aircraft to obtain larger quantities from suppliers in China, the company said.
This weekend, a first flight with a test A330-800 aircraft, transported approximately two million masks from Tianjin back to Europe, of which the large majority will be donated to the Spanish and French authorities.
Updated: March 26, 2020 10:25 AM