Airbus delays plans of creating an assembly line for A321 in France

Airbus (EPA:AIR) cited the rising uncertainty ascribed to the Coronavirus pandemic for slashing production of its most-popular A320 jetliner earlier this week. On Friday, the world’s largest airplane manufacturer also deferred plans of establishing a new assembly line dedicated to its A321 airliner in Toulouse, France, as it continues to combat the economic blow from the health crisis.

Originally, the European airplane manufacturer had announced plans of creating its assembly line in France at the start of the new year. A sharp increase in demand at the time was making it difficult for Airbus to sufficiently ramp up production at its Hamburg, Germany facility to cope up with it.

Airbus To Stop Producing A380 In The Upcoming Months

A new assembly line in France was, therefore, envisioned to meet the demand for Airbus’s ambitious single-aisle airliner.

According to Airbus, the company still plans on converting its production facility for A380 in Toulouse to an assembly line for A321, it, however, sees no reason to prioritize the move at a time when the airplane manufacturer is already faced with various financial challenges due to the Coronavirus pandemic.

A spokesman for Airbus commented on Friday:

“Our plans for an A321 line in Toulouse are paused, on hold. When we see rates going up again, we will reconnect to the plans.”

CEO Guillaume Faury also highlighted in an interview earlier this week that Airbus is expected to halt its new investments in 2020 to preserve cash.

Airbus, however, did not divulge its plans for the massive plant in Toulouse for A380 production at this stage. The world’s largest jetliner is expected to retire in the upcoming months that stirs uncertainty for the future of hundreds of workers at Airbus.

French Unions To Fight For The Toulouse Facility

French unions, on the contrary, are likely to fight for the Toulouse facility. Xavier Petrachi of CGT union recently commented:

“Unlike Guillaume Faury who wants to halt non-essential investment, we think the arrival of a new A321 line in the Lagardere factory must be maintained.”

At £53.48 per share, Airbus is currently more than 50% down year to date in the stock market. The stock had recorded a record-high of £121.86 in late January. Airbus’s downward rally in March has wiped all of the gains that it posted in 2019.

At the time of writing, Airbus has a market cap of £41.95 billion.