Airbus offers exit bonus in bid to spur buyouts in France

[EDINBURGH] Airbus is offering French employees a bonus of two months' salary if they accept voluntary severance by the end of next month, stepping up efforts to thin its ranks with fewer forced layoffs.

The pandemic-hit planemaker is also offering to top up monthly wages by as much as 350 euros (S$566.66) for up to a year if workers move permanently to lower-paid jobs, according to a letter to French staffers Monday that was seen by Bloomberg. A two-year minimum period before employees can switch positions has also been removed, and Airbus is offering pension incentives for people who take early retirement.

The European aerospace giant, grappling with an unprecedented collapse in air travel because of the coronavirus, is trying to entice workers to leave to limit tougher measures it's unlikely to avoid altogether. The planemaker has pledged to slash 15,000 jobs across its operations, with France braced to absorb about one-third of those.

Airbus will provide an update on the exit package at its next works council on Sept 24 and should close discussions with unions Oct 15, according to the letter. Nearly 2,000 staff members have already expressed a serious interest in voluntary departure, Donald Fraty, the head of human resources for France, said in the letter.

Chief executive officer Guillaume Faury has warned that voluntary departures were unlikely to be enough to meet Airbus' job cuts target. In a missive to staff sent last Friday, he said the summer travel season fell short of the industry's expectations and the company is now prepared for a "deep and long downturn". Airbus shares were little changed as of 9.02am in Paris. The stock is down 45 per cent this year.

With travel depressed and debt mounting, airlines are preserving cash by delaying and, in some cases, cancelling deliveries of Airbus and Boeing aircraft.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

DELIVERY DROUGHT

"While a number of airlines are taking deliveries this year of aircraft that were close to completion, we expect them to stubbornly refuse to take planes until demand picks up significantly," Bloomberg Intelligence analysts George Ferguson and Rob Barnett wrote in a report Tuesday.

Mr Faury faces pressure from unions and the French and German governments - the biggest Airbus shareholders - to protect employment. He has previously said that compulsory cuts will be "a last resort". The voluntary severance period runs until the end of December. The company is also negotiating long-term furloughs with unions for application in a "defined scope", according to the letter.

An Airbus spokesperson said the company is keeping employees informed at all stages. He declined to discuss specific details of the letter.

BLOOMBERG