French-based plane maker Airbus announced plans today to cut the equivalent of 6,000 jobs in reaction to a sharp fall in airliner demand, but said it could weather the market turbulence without cutting permanent staff.
Clearly mindful of political sensitivities ahead of French elections this year, the Toulouse-based firm said roughly 1,000 workers would leave through voluntary redundancy and another 5,000 'virtual' jobs would be trimmed by ending part-time and temporary work contracts.
The company also put a brave face on what many analysts believe is developing into the worst crisis for the global airline industry ever, saying it believed it could maintain annual deliveries of 300 planes in 2003 - the year when deliveries are expected to hit a low.
Airbus said it delivered a record 325 aircraft last year, up from 311 in 2000, generating turnover of $20.5 billion.
But analysts expect this year's deliveries - which determines turnover - to fall back well below 300, putting pressure on management to find ways of cutting costs to stay profitable, including possible job cuts.
Arch-rival Boeing Co has already announced plans to cut 30,000 jobs at its commercial aircraft division in response to the industry downturn.
A hefty 101 order cancellations by airlines last year dragged its net order intake down to 274 jets. Roughly 90 per cent of those cancellations were linked to companies faced with bankruptcy, it said, naming Swissair, TWA and Sabena.
Shares in European aerospace group EADS, which owns 80 per cent of Airbus, were up 2.03 per cent at $#8364;14.08 at noon. Shares in its other shareholder BAE Systems were up 0.54 per cent.