Aviation industry hits keep coming
Aviation industry players large and small continued to shutter factories and furlough workers amid the escalating pandemic, though some general aviation aircraft makers pressed on.
The spread of COVID-19 across the world continued to have the widely expected short-term side effects of mounting job losses and business shutdowns, and aviation was not spared. Since Textron Aviation announced rolling furloughs that commenced March 23, the grim toll of job losses has climbed.
Business jet maker Bombardierand GE Aviation each laid off thousands of workers. The Boeing Co.’s production halt prompted a cascade of staff cuts at suppliers and vendors, and the disruption extended to smaller turbine aircraft makers like Epic Aircraft in Bend, Oregon.
Aside from Textron, other top producers of piston aircraft remained operational as of March 25. Cirrus Aircraft, based in Duluth, Minnesota, and owned by China Aviation Industry General Aircraft, was operating on March 25, according to a staffer who answered a call to company headquarters.
Piper Aircraft, based in Vero Beach, Florida, announced new procedures and precautions on March 11, including suspension of public factory tours and requiring some employees to self-quarantine based on their potential exposure; however, a company spokeswoman recently told a local newspaper that production continued, and while staff had been told to stay home should they develop symptoms, Piper had not seen an increase in sick calls.
Aviation analyst Brian Foley said some segments of the aviation industry—business jets, in particular—may be better positioned for post-pandemic recovery than they were in 2007, when the last major financial crisis began to unfold.
“The industry is arguably in better shape to weather this downturn,” Foley said, noting that banks had more liquidity and reserves going into the pandemic, and finance rates remain “significantly lower than they were back then.”
Business jet makers have smaller backlogs than they did going into the 2008 financial crisis; however, “some manufacturers put added teeth in their contracts since the last downturn, aimed to keep airplane flippers out of their books. While there will inevitably be some cancellations and deferrals, the current order books are stickier.”
