"New reality" - Embraer slashes 20% of workforce, Airbus cuts A320 output


The chill winds are hitting the aircraft manufacturers quicker than they anticipated. Massive order books are starting to evaporate as carriers dump or defer orders as the global economic downturn slashes demand for air travel.

Engine manufacturer Safran yesterday disclosed 8% of its order book had been affected by cancellations and postponements of orders for CFM56 engines that power single-aisle commercial aircraft, with more cuts expected in coming months.

Airbus has now moved to trim production rates of its A320 Family programme from 36 to 34 per month from Oct-2009. Production rates of the A330/A340 family will be maintained at the current level of 8.5 per month, and not increased further as previously planned. CEO, Tom Enders, stated, "I do not exclude further production cuts if the need arises." Airbus' delivery target for 2009 remains in tact.

Meanwhile, Embraer announced plans to cut 4,300 jobs, or approximately 20% of its 21,362 employees, as it prepares for a sharp downturn in aircraft demand. Unlike Airbus, the Brazilian aircraft manufacturer sees a reduction in deliveries this year, cutting its forecast from 270 to 242. According to Embraer, "it has become inevitable to implement a revision to the cost structure and workforce, adjusting them to the new reality of demand for commercial and executive aircraft".

Data from the General Aviation Manufacturers Association (GAMA) shows worldwide shipments of general and regional aviation aircraft decreased for the first time in five years in 2008.

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