Airbus slows services push amid coronavirus crisis
PARIS, June 30: Airbus has postponed its target of building a $10 billion services business amid the coronavirus crisis, but is sticking with a strategy of supporting airline operations, a senior executive said as the company heads for a broader shake-up.
Airbus (AIR.PA) has said it wants to boost services revenues to $10 billion by 2030 compared with over $4 billion in 2019, mirroring a push by rival Boeing (BA.N).
But the coronavirus travel crisis has hit demand for services such as spare parts and maintenance data-crunching.
"It is postponing the ambition a little in terms of timing, but the strategy is still relevant. We still think developing services makes sense," Philippe Mhun, executive vice-president programmes and services, told Reuters.
"It is still a scale we can look for, but it is a question of timing and how this crisis will transform our industry, and it's too early to say," he said of the $10 billion target.
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.
"Aircraft are being grounded and this impacts services as much as the aircraft (manufacturing) business. Some (services) projects were paused and postponed," Mhun said, adding Airbus was being more cautious about inventory of parts. -Reuters