Economy
Virus leaves aerospace reeling

Aerospace has taken a big hit from COVID-19, with aircraft production
halted, the space program hobbled and airports seeing a huge drop in
business.

Jane Nicholes
April 2020

Neither of the world’s great airplane makers, Airbus and Boeing, is building
commercial jets in the United States today. That’s just one more symptom of the
impact of COVID-19, albeit an economic one.

In a matter of weeks, the aerospace and aviation industry has collapsed, victim of
both the coronavirus pandemic and its effect on travel.

Economic drivers along the Gulf Coast such as Airbus in Mobile, Stennis Space
Center in Mississippi and Michoud Space Center in New Orleans are in varying
stages of reduced production. The number of daily passengers through Pensacola
International Airport has dropped about 90 percent from 3,000-plus to about 330.

With the emphasis on people staying home and staying apart to avoid transmitting
the virus, it’s no surprise that they aren’t inclined to share airplanes with each other.
Worldwide travel restrictions also have drastically affected air travel. Consequently,
airlines suddenly aren’t inclined to order new planes, and they would like to postpone
or cancel delivery of the ones they have already ordered.

Adding to industry pressures are differing and rapidly changing state and local
mandates regarding states of emergency, travel restrictions, what businesses may
remain open, whether people must stay home and whether they must observe
curfews.

On April 6, Airbus announced that its final assembly line at its growing complex in
Mobile would “pause” production until at least April 29.

The reason given was “several factors related to the ongoing COVID-19 pandemic,
including high inventory levels in the sites and the various government
recommendations and requirements which impact different stages of the overall
industrial production flow.”

Employees whose jobs can be done at home continue to work, and operations such
as building maintenance continue at Mobile Aeroplex.

Construction of the second final assembly line continues and still is expected to be
completed on time in the second quarter of this year, according to Kristi Tucker,
spokeswoman for Airbus in Mobile. Completion of the first of the added line of A220
jets is still targeted for the third quarter.

Employees directly affected by the pause will still be paid through April 29. That’s an
important point for Mobile at a time when millions of Americans have been laid off or
furloughed because of the coronavirus.

“I think that the way they are handling it is very commendable, in that they will
continue to pay their employees,” Mobile Mayor Sandy Stimpson said during one of
many news briefings he’s held to address the pandemic. “Not every company can do
that. We’re grateful to have a corporate company like Airbus do the things that they’
re doing, not just for their employees but for the community also.”

Just three days earlier, Airbus had announced the donation of 40,000 masks to
Mobile and Baldwin counties for healthcare workers and first responders dealing with
the pandemic. The masks are a type used by Airbus workers in some areas of
production.

Prior to the announcement of the pause, Airbus had implemented hygiene, cleaning
and social distancing measures to help protect its employees. Among the changes
was a two-hour separation of the facility’s two work shifts, Tucker said. Previously the
shifts ran back to back and sometimes overlapped. The break allowed for additional
“super-cleaning” of work space and equipment, and also kept the two shifts of
employees from having any contact.

Tucker said the changes had slowed production somewhat but that Airbus still
expected to meet its goals.

But at different times since COVID-19 began to spread around the world, Airbus
facilities in China, Spain, France and Germany have had to shut down production
under differing government orders. The company has withdrawn its financial
forecasts and has decided not to pay a scheduled stakeholders’ dividend of 1.5
billion euros.

In a March 23 video message posted on Facebook, Airbus CEO Guillaume Faury
said the world faces two crises, health and economic. Both must be faced
simultaneously, he said.

“At the beginning, production efficiency may be low. Even, sometimes, very low. It’s
OK. We’ll recover efficiency later.”

As for Boeing, it was already facing financial pressures before the scope of the
COVID-19 pandemic became clear in the U.S. It has indefinitely suspended all
commercial airplane production in Washington state and South Carolina. At this
writing, one employee in Washington has died from the virus.

Boeing employees who cannot do their jobs at home will be paid for up to two weeks
before being asked to use their own paid time off days. If those are exhausted, they
become eligible for unemployment benefits.

Boeing continues to struggle with issues from the grounding of its 737 Max planes
due to fatal crashes. Its emphasis on widebody commercial production vs. the
strategic investment by Airbus in narrow-body jets such as those made in Mobile put
Airbus in a better financial position over the long haul, according to Simple Flying.

Beyond that prediction, the future of airplane manufacturing, like so much else
affected by the coronavirus, is unclear.

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A bump in the road for MRO

The maintenance, repair and overhaul operation of ST Engineering Aerospace in
Pensacola closed one day March 31 after management learned the previous evening
that an employee had tested positive for COVID-19.

The employee had not been on the site since March 18. A cleaning crew sanitized
the facility before it was reopened to employees the next day, said Marketing
Manager Brian Beasley.

ST Engineering already was following practices recommended by the Centers for
Disease Control and the Coronavirus Task Force, but called in the cleaning crew out
of an abundance of caution, according to a news release.

The company, which works on commercial aircraft, has one hangar in Pensacola and
a larger operation in Mobile. The pandemic has not had an impact on plans to
develop additional ST Engineering hangars at Pensacola International Airport.
Design work is continuing on a second hangar. There eventually will be four MRO
hangars at the airport.

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Pandemic stalls NASA program

In March, the pandemic indefinitely halted work on NASA’s Space Launch System at
Michoud Assembly Facility in New Orleans and Stennis Space Center, Miss. Both
were elevated to “Stage 4” response level, the highest response level where only
personnel needed to protect life and critical infrastructure are allowed. The Ames
Research Center in California also was put at the same level while other NASA
centers remained at Stage 3, requiring mandatory telework and some mission-
essential work on site to continue.

The Stage 4 designation will impact work on the Space Launch System and, to a
lesser extent, the Orion spacecraft. The core stage for the first SLS mission was
recently completed at Michoud and shipped to SSC for testing leading up to a static-
fire test later this summer. “The NASA and contractor teams will complete an orderly
shutdown that puts all hardware in a safe condition until work can resume,” the
statement said.


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Airports go from flying high to barely flying

For an airport that had been experiencing growth beyond anything they had
projected, the impact of the coronavirus has been significant.

“Traffic is down 90 percent,” said Dan Flynn, director of Pensacola International
Airport. That’s to be expected with many heeding the advice, “if you don’t need to
travel, don’t.”

Last year at this time there would have been 3,000-plus passengers daily, but now it’
s down to 333.

“In the past we would have 38 to 40 departures. The other day it was four,” he said
during an April 8 phone interview. The flights that are operating have 10 to 20
passengers, a far cry from the norm. On the plus side, cargo flights are up from one
a day to two and sometimes three

The pain is not felt just by the airlines. Food services at the airport also have taken a
hit. Thirty days ago food services had 87 employees, but just two today. News and
gifts went from 16 people to six. On a good day concessions would do $21,000 in
business, and now it’s $800. The car rental counters are also virtually empty.

“There’s not a lot we can do, nor should we be,” Flynn said. The big push will be
when the pandemic has eased and they’ll have their hands full getting people to fly
again.

“When we start seeing the light, what are we going to be collectively doing to build up
the consumer confidence?” he said. They are working on plans now.

Flynn said that the big challenge will be getting people back to flying. Their
confidence levels have to be up before they will get on a plane again with strangers.

Before that can happen, beaches have to be open and other destination activities
available. The longer this goes on, the more people will look to other ways to conduct
business, like telecommuting.

Airports all over the country will be looking at their position, which has been
fundamentally altered, he said.
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