European aerospace group EADS, parent of Airbus, will have to adapt its production plans to cope with the economic crisis, but is not thinking of cutting jobs for now, its chief executive said on Saturday. Tough economic conditions were taking their toll on the company's commercial activities even if they were not affecting defence contracts, Louis Gallois told Reuters on the sidelines of an annual security conference in Munich.
"What is characterising the situation is a lack of visibility," Gallois said. "We will have to adapt our production plans." Airbus recently shelved plans to increase the production of single-aisle jets and has said it would be ready to lower production if circumstances warranted.
In a sign that the situation may be worsening, EADS said on Friday that airlines had cancelled more planes than they purchased from Airbus in January. That left the European planemaker with a negative net order tally, a predicament shared with US rival Boeing. Airbus had said it had sold 4 single-aisle jetliners to Turkish Airlines only to receive cancellations of 12 similar planes from one or more unidentified carriers in January, reducing its order book by 8 aircraft.
Aircraft demand is diving due to recent high oil prices, weak traffic, overcapacity and fears of recession that have pushed airlines into their worst crisis for decades. Still, Gallois said alterations to output need not affect jobs, hundreds of thousands of which have been shed around the world in recent months. "At this stage, we do not see any effect on employees." EADS was in a better position than Boeing to deal with production and staffing because it had already embarked on cuts in personnel in 2007 as part of its Power 8 restructuring program.
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