France, April 29 Planemaking giant Airbus SE said it consumed 8 billion euros ($8.7 billion) in cash in the first quarter as Chief Executive Officer (CEO) Guillaume Faury warned of the gravest crisis the aerospace industry has ever known.

Some 3.6 billion euros of the cash hit came from a payment to settle a bribery case, eating up reserves while Airbus grapples with the coronavirus crisis, the company said in a statement Wednesday.

Faury warned employees in a letter Friday that Airbus must quickly adapt to a shrinking aerospace sector as the pandemic undermines demand for new aircraft and threatens existing orders as airlines run short of money. A plan to slash output by one-third announced earlier this month may not reflect the worst-case scenario, he said.

Airbus said it has reduced anticipated capital spending this year by about 700 million euros to 1.9 billion. It has already extended credit lines and clamped down on expenses to give it access to 30 billion euros to manage the pandemic.

First-quarter adjusted earnings before interest and tax fell 49 per cent to 281 million euros and the company swung to a net loss. It delivered 122 aircraft, all but 18 of them narrow-body jets. Sixty planes could not be handed over due to the virus.

Faury said Airbus is still assessing the implications of Covid-19 and cant yet provide a financial outlook for the full year. It is set to deliver around 600 planes, based on reduced production targets, a far cry from its record 863 in 2019.

The CEO has warned Airbus faces tough decisions on jobs but gave no update beyond the more than 6,000 positions furloughed in France and the United Kingdom (UK).

Airbus shares have fallen around 60 per cent in the year so far, with rival Boeing Co seeing a similar drop. Boeing also reports earnings Wednesday.

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