Airbus postpones services business push due to coronavirus

The virus has hit demand for services such as spare parts and maintenance data-crunching

Airbus has delayed its target of building a $10 billion services business amid the coronavirus crisis, but will go ahead with a strategy to support airline operations.

It has said it wants to boost services revenues to $10 billion by 2030 compared with over $4 billion in 2019, similar to a push by rival Boeing.

But the coronavirus travel crisis has hit demand for services such as spare parts and maintenance data-crunching.

Industry sources say Airbus has effectively dropped the goal and is restructuring its services business, re-allocating some staff elsewhere. Wider job cuts are also imminent.

Despite cash pressures, Airbus is pursuing plans to build the world’s longest-range narrow-body plane, the A321XLR.

“This is a project we have really protected. It is performing as per the initial plan,” Philippe Mhun, executive vice-president programmes and services said. Its first flight is planned for 2022 and entered into service in 2023.

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Also prioritised are plans to put more seats in the A350.

Airbus has cut monthly A350 output by 36 per cent to six due to weak sector demand, sending the programme back into loss and raising questions about whether Airbus should revive plans to redesign some parts to cut production costs.

“I am really comfortable that after weathering the crisis the combination of A350-900 and -1000 will bring a lot of value to the market,” he said.

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