Airbus boosts liquidity to €30bn with new credit line; suspends dividend

By Scott Hamilton

March 22, 2020, (c) Leeham News (Seattle Time): Airbus today announced a new €15bn credit facility to boost liquidity during the COVID-19 virus crisis.

In an early morning release March 23, Toulouse time, Airbus said it is suspending its dividend and its 2020 guidance.

“Our first priority is protecting people while supporting efforts globally to curb the spread of the coronavirus.” said Airbus Chief Executive Officer Guillaume Faury.

“We are also safeguarding our business to protect the future of Airbus and to ensure we can return to efficient operations once the situation recovers. We have withdrawn our 2020 guidance due to the volatility of the situation. At the same time, we are committed to securing the liquidity of the Company at all times through a prudent balance sheet policy.”

Measures taken

Airbus announced the following moves: it will

  • secure a new credit facility amounting to €15bn in addition to the existing €3 bn revolving credit facility;
  • withdraw the 2019 dividend proposal of € 1.80 per share with an overall cash value of approximately € 1.4bn; and
  • suspend the voluntary top up in pension funding.

Airbus said it has « significant liquidity available to cope with additional cash requirements related to the coronavirus. Liquidity resources previously standing at approximately €20bn, comprising around €12bn in financial assets at hand and around €8bn in undrawn credit lines, were further bolstered by converting an existing €5bn credit line into a new facility amounting to €15bn. Available liquidity now amounts to approximately €30bn.


7 Comments on “Airbus boosts liquidity to €30bn with new credit line; suspends dividend

  1. Suspending the Dividend makes so much sense. Unlike another company that borrwed to pay a dividend. I suspect at least a 30% drop in deliveries this year. Tough times

  2. That was long overdue as Airbus kept on maintaining the same language until last week, that it would deliver 880 A/C this year (Boeing has no guidance from the Max debacle and we know their rates for the other makes).
    The unions in Spain wanted to stop working, the country being in partial confinement to slow the outbreak. Airbus Spain opposed to this. The French unions relayed this on Monday stating that it is not possible to observe safety rules in the current Health Hazard context. I trust they will all return to work today, following a complete assessment of work places & processes and new rules put in place aiming at all production and assembly sites to protect people.
    That being said, my basic question is: Are there still Airlines accepting new deliveries at all currently? To date, neither Airbus or Boeing comment on this. Lufthansa clearly said last week that the least they need now are new aircraft as the immediate Focus is on cash preservation. I think Delta pointed at the same direction last week too.
    What are the intentions? Park aircraft, hoping for a miracle to happen in 3-4 months time? Benefiting from short-term airlines bailouts? Sooner or later, the situation is not tenable anyway (how strong is the supply chain).
    This of course does not apply only to A/B but also to Embraer, ATR, etc… Textron is taking a break, Bombardier is assessing, Gulfstream is silent.

    Message to all: Keep well Folks!

    • IMHO, the intention to re-start production is to allow a proper shut down preparation if necessary.
      Many sub-suppliers have already dramatically reduced their production capacity or even closed.
      And, as you said, very few airlines would be interested to be delivered now… not to mention the other pending key question: how would they finance them?

    • “Boeing has no guidance from the Max debacle and we know their rates for the other makes.”

      Which covers the MAX and its vagaries and not the overall corporation future as it sits on a platform made even more volatile by fallout from the CoVid19 epidemic.
      Surmounting the MAX crisis has just turned so much more difficult. Which afaics would demand further guidance to shareholders. Pretending that “what has been said in relation to MAX” is sufficient to describe the future ..

  3. Is that 12 bill of financial assets in hand mean the value of planes built but not yet delivered?
    What creditors want to know is real liquid assets not financial circumlocutions.

    • cash or equivalent. no credit mentioned.
      Inventory is not monetizable without credit as “intermediary”. ( Except you are Boeing and can
      obfuscate by way of various gimmicks attributed to be “Good American Accounting Practice”. )

      Will be interesting to see: A lot of bookkeeping mechanics available to US companies are more or less cosmetic pimping of numbers. Overstate the value of assets, define outlay as asset, understate liabilities. Very much dependent on group humming over the Tzars new clothes”. Will this squash some feet in the month to come?

    • It is probably not inventory. But as I understand those investments had that value at the end of 2019. I would assume those shares are now more in the vicinity of 8-9 bill and shrinking as the whole stock market crashed.

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