Rolls-Royce CEO: Aviation industry will take 3-5 years to get back to normal
20 May 2020, 09:23 | Updated: 20 May 2020, 10:45
The CEO of aerospace giant Rolls-Royce has told LBC it will take 3-5 years for the aviation industry to return to normal following the coronavirus pandemic.
Warren East, the chief executive of Rolls-Royce, was speaking after the announcement that the aerospace company planned to shed 9,000 jobs after the aviation industry was hit hard by the coronavirus pandemic.
Mr East told LBC 50 per cent Rolls-Royce's business in 2019 was in the commercial aerospace sector while 25 per cent was defence-related activities and that the business no longer has anything to do with cars.
He said the company was "relatively robust" prior to the coronavirus outbreak, with several years of improving "cash generation."
He said the coronavirus pandemic was having no impact on the company's defence or power arms.
But, he revealed to Nick Ferrari the company was taking a big hit in revenue when it came to its commercial aviation arm.
"Airlines at the moment have vast proportions of their fleets grounded, and that's damaging the airlines," he said.
He said "the general consensus" across the aviation industry was that it would take several years to recover.
The aerospace CEO said the 9,000 jobs which were being cut were 17 per cent of the company's total workforce.
Rolls-Royce has been in touch with the Government and currently has almost 4,000 staff on furlough.
He said if the company can get through the "tremendous impact" of Covid-19 then it could start to get back to normal.
Mr East told LBC it could take "several years, three to five," for the aviation industry to "come back to the sort of levels that we saw in 2019."
On Wednesday the firm cited the "unprecedented" impact of Covid-19 on the wider aviation industry as the reason for the reorganisation.
The company said the cuts could result in £700 million in savings towards an overall aim of £1.3 billion in annual savings.
It said it will also cut spending across its plant, property and other areas to strengthen its finances.
In a statement on Wednesday, a spokesperson said it was "increasingly clear that activity in the commercial aerospace market will take several years to return to the levels seen just a few months ago."
It said the job losses would be felt worst in its civil aerospace business - adding that it had begun consultations with unions.