Philippe COUTEAUX, Senior Vice-President, Safran Group Strategy & Programs

Hello everyone. You've just heard the societal perspective from an aircraft manufacturer. I'll now try to share with you the engine maker's perspective. And when we talk about decarbonization, the engine maker is always in the eye of the storm, as you know, for very understandable reasons.

So can innovation alone meet the challenge of civil aviation? My first instinctive response is intimately linked to the fact that I will soon have spent nearly 40 years at the Safran Group, and so it's strongly influenced by that. Safran's DNA is largely built on very strong innovation. We are, as you probably know, the French group that filed the most patents in 2021 and 2022, with over 1,200 inventions.

And to answer Mr. Castenet, it's not just level-1 engineers who file inventions — it's not just about filing patents. It's also about watchfulness, intellectual property protection, which is precious for our industry. You also need level-2 and level-3 engineers to tackle these subjects.

So in this context, my instinctive answer is: of course, yes, innovation is absolutely vital to meet the challenge of civil aviation. But it is very insufficient if it is not accompanied by resilience. And the resilience of our ecosystem is just as essential as our capacity for innovation. It must allow our industry to navigate the various transitions we need to address — I'm talking about technological transition, industrial transition, but also climate transition.

And this resilience has particular resonance in today's world, with all the geopolitical constraints and the multiple crises we face. Beyond this resilience, we also need ambition. Antoine, we talked about it — our industry must remain ambitious in its capacity to redesign the aviation of tomorrow. It must not yield to the multiple pressures we face, which, it should be noted, place a major responsibility on aviation for greenhouse gas emissions.

So it's a political ambition we must have, but also an industrial and operational one. This triptych — innovation, resilience, and ambition — is what I believe are the three pillars that will enable us to meet all these challenges of civil aviation.

Now I'd like to talk a bit about innovation in aeronautics. As you know, it is crucial, and became even more so with the Covid crisis and the economic crisis that followed. It is the number-one factor for differentiation and longevity on the market. In all cutting-edge sectors, we see that companies, universities, and laboratories working hand in hand form an ecosystem whose performance determines the standing of national economies on the global stage.

There is always a risk of falling behind given the fierce competition in these high-tech industries. So to avoid being outpaced in this global competition, we must maintain a collective effort in innovation. The goal is clear: it must enable France and its aeronautics industry to hold its rank — particularly its export rank — since, as you know, aeronautics is the leading contributor to the trade balance.

What we observe when we look at recent history is that the Covid crisis created a genuine opportunity to redefine our priorities and our technological innovation strategy. I'll try to illustrate this with a few examples drawn from Safran's experience, since this group has been working for over 50 years toward more carbon-neutral aviation — we didn't start during Covid, and we didn't start because of Greta Thunberg.

Each technological evolution in engines has allowed us to gain more than 1% per year in fuel consumption. That means over the last 70 years — and I'm not going back to the era of propeller engines, even though we may return to them potentially — the fuel-burn gains, which is our key criterion, have been over 80%, which is considerable, in increments of about 15%, corresponding to the introduction of different technological advances.

Today we have much more efficient engines that consume less fuel. I remind you that aircraft flying today consume five times less fuel per passenger-kilometer than in the 1950s, as you pointed out, Mr. Castenet. It's important to keep repeating this: today an aircraft consumes less than 3 liters per 100 kilometers per passenger. Fortunately, some airlines are now highlighting this in their advertising, which is a very good thing.

The combined efforts of the entire industry have contributed to halving the carbon footprint per passenger-kilometer over the last 30 years. Looking at the period from 2010 to 2018, we see an improvement of roughly 17 to 20% in average consumption per passenger — far from insignificant, and it shows our industry's capacity to transform itself.

Preparing for the future is at the heart of priorities for a group like ours. To illustrate: our R&D spending corresponds to more than 3% of our annual revenues, with technology maturation cycles that are very long — on the order of five to seven years.

This technology maturation activity must of course rely on budgets — Antoine spoke about the four types of budgets — but we need budgets that are predictable, stable, and that combine both company self-financing and external funding. And for an engine maker at the forefront of this climate transition, decarbonization work represents over 75% of our R&D investment. That's considerable.

Looking at the 2021-2024 period, this represents an investment of 4 billion euros for Safran. So you can see the level of investment that engine makers — and we are not alone — are putting into this work.

We are working on developing disruptive aircraft for the 2030-2035 horizon, aiming for carbon neutrality by 2050. This work is done in very close collaboration with aircraft manufacturers along several axes.

The first axis is the design of ultra-efficient engines for 2035 — engines capable of running on 100% sustainable aviation fuel, or SAF, and ultimately 100% hydrogen. The engine we are working on today must deliver a 20% improvement in fuel consumption compared to the current latest engine standard — what we call the LEAP on short and medium-haul. This requires fundamentally rethinking engine architecture, working on very high bypass-ratio engines.

This in turn means working on aircraft architectures — that's why we collaborate closely with aircraft manufacturers on both the fuselage and wing design, where there's also significant innovation.

The second axis is the development of electrified propulsion. Of course, we'll start with short-range aircraft — I'm talking about urban air mobility up to regional aircraft with 50 passengers — and this involves hybridizing propulsion systems. The third axis, continuing this theme of greater electrification, is the use of electrical energy for non-propulsive systems, and the use of lighter materials wherever possible.

Because when we talk about decarbonization of engines, it's intuitive. But when we talk about decarbonization of equipment like aircraft seats, electronics, windows, and so on, it's much less intuitive. That's why material research is essential — finding lighter materials, alternatives to certain materials that may become regulated. This is absolutely vital for our industry.

The fourth axis is the work on biofuels. We've discussed this extensively — advanced biofuels that can be directly blended with kerosene, known as drop-ins, and synthetic fuels produced from low-carbon electricity or synthetic gas. And of course, work on hydrogen — but hydrogen produced from zero-carbon electricity.

Hydrogen represents a major decarbonization potential for us. It's probably more accessible on short and medium-haul than on long-haul, for obvious storage and volume reasons. We're working very actively on these points, again in close collaboration with aircraft manufacturers like Airbus.

In all cases, this requires the massive deployment of decarbonized electricity production. Antoine, you alluded to this earlier. And this point is perhaps an opportunity to recall a fact from history: all the progress of the past 70 years was entirely in the hands of the aeronautics industry. This industry was, in a way, master of its own future and master of its own progress trajectory.

But today, half the success of our net-zero trajectory by 2050 actually depends on a third-party industry — the energy companies. Energy companies will need to produce the quantities of sustainable fuel necessary for air transport, and the quantities of electricity also needed. This dependence on a third-party industry is unprecedented and, of course, not without risk.

We must address these risks through technological responses — particularly the compatibility of our equipment with future fuel types and grades — through regulation that can be both very incentivizing, as we see especially in North America, and more coercive, as we see in Europe — I'm thinking of the EU RefuelEU Aviation regulation, for example.

And through strong action to federate all stakeholders. For example, the European Alliance for Sustainable Aviation Fuels, known as A4SAF, created in 2022. Safran has the honor of chairing its aeronautics chamber, and it helps bring out projects and industrial-scale production programs. That industrial scale-up is fundamental in SAF production.

The decarbonization of aviation also requires us to develop all these technological options massively, but in parallel — because resource and raw-material constraints could limit the capacity of any single pathway. These different technologies will also become available at different maturities and time horizons; the whole point is to work on them in parallel.

I would add that for a company like Safran, the decarbonization strategy is also implemented through organic growth, targeted acquisitions, and venture capital actions that allow us to master certain key technologies. On SAF manufacturing, for example — because we will also be consumers of SAF to test our engines — and also on subjects like carbon capture, since carbon capture is obviously a direct vector for CO2 elimination.

Finally, innovation will also come from energy sobriety actions. That is also fundamental, even if in quantitative terms it's less significant than the downstream Scope 3 we discussed earlier. But we must imperatively reduce our Scope 1 and 2 emissions — for example, reducing dependence on natural gas, increasing the use of renewable energy to run our facilities, all actions aimed at optimizing travel, for instance.

And we mustn't forget in this domain the actions around purchasing — what we call upstream Scope 3 — where all the actions offering opportunities for improvement in logistics, for example, in transporting our materials. There are innovation actions underway, notably around modal shift, which basically consists of replacing air transport with maritime transport of our components.

But as I said earlier, innovation goes hand in hand with resilience. And here again, the recent crisis was a deep revealer of the resilience of our ecosystem. We experienced it at Safran: at the heart of the Covid crisis, workforce adaptation to workloads in 2020 affected 20,000 employees in the group. Fortunately, in France there were government support measures — I'm thinking of the short-time work scheme, Corac funding, and others.

The activity transformation agreement and all these elements allowed us to avoid net layoffs in France. That was fundamental because we were able to protect our resources and our skills — and that was not the case elsewhere in the world. I'm thinking particularly of North America, which suffered greatly and where we still see many consequences today in industrial terms.

This resilience must be maintained and developed to ensure our supply chain remains capable of honoring its commitments. And we see today that it's difficult — that it will be able to produce according to the quality and deadline requirements demanded by aircraft manufacturers who are increasingly exacting, seeking to ramp up rates given market demands.

It must be able to create decarbonized industrial footprints, regardless of the operation or country in which they operate. And finally, the entire ecosystem must adapt to geopolitical constraints that reduce access to certain materials — I'm thinking of Russian titanium, for example, or certain suppliers. We saw this more recently with Ukrainian suppliers, and even more recently with Israeli suppliers.

Other initiatives can also make us more resilient, and they involve efforts to strengthen our sovereignty. What does that mean? It means protecting investments on our sites in France to preserve our autonomy. It means protecting high-value-added know-how on our French sites. It means not cutting off the hiring flow of young people in France.

We even demonstrated this at Safran in 2020: even though we had frozen all hiring, we still recruited 300 to 350 young people, because we considered it fundamental to maintain that flow. Yes, recruitment is an essential role in resilience — in terms of numbers, and especially in anticipating the key professions we'll need tomorrow.

Taking Safran as an example again: we will have recruited nearly 18,000 employees in 2023, and we expect to recruit a similar number in 2024, which will allow us to return to pre-Covid headcount levels by next year. But we'll do it by integrating all these new skills and professions — those related to data or artificial intelligence, to name just the most publicized ones. But we also lack maintenance technicians — we probably have as much of a shortage as airlines have of pilots today. So there are major recruitment challenges.

As I was saying, all this innovation strategy and this capacity for resilience must be supported and reinforced by a very strong ambition to redesign the aviation of tomorrow. Our ambition is to not have to forbid future generations from traveling around the world. Degrowth, which is much discussed in the media and which we discussed again this morning — my respects to Mr. Castenet — is not for us the right solution. You knew this would provoke reactions and debate.

This ambition also enables aeronautics actors to explore alternative technologies that will ensure the net-zero trajectory. Because we know SAFs are not the unique solution — they are the most accessible solution for aviation, but the decarbonization trajectory we're targeting will also pass through other compensation and carbon capture solutions in which our companies can play a role.

It's a whole spectrum of new technologies opening up to us, a new field of investigation, and the creativity and rigor of the aeronautics industry are assets that will allow us to tackle these new technologies.

And this ambition in aeronautics also, paradoxically, passes through the development of our defense activities. Indeed, there are enormous numbers of technologies, as you know, that serve both civil and military interests — I'm thinking of optronics, inertial positioning or navigation systems, space equipment, avionics, and so on.

To return to the propulsion example: mastery of the high combustion temperatures required by military aircraft is extremely useful for developing civil applications. So this ambition, with the support of defense, is essential for us.

This ambition is also about communicating and acting to demonstrate that our CO2 reduction targets are in fact achievable. Because the strong growth of the sector sometimes fuels doubt among certain critics — we heard it again this morning, and we see it with the number of orders placed at the Dubai show last week, which shows the effervescence of our market. There are always doubts and criticisms, and that's why it's also essential to bring the entire supply chain along behind these objectives and decarbonization plans — from the largest suppliers to the smallest.

And there are real challenges in engaging small suppliers toward decarbonization strategies and action plans.

Ambition is recognizing that the need to travel does not dry up and that it remains a formidable tool for enabling people to communicate on Earth — as Saint-Exupéry would say. So rather than dreaming of a world without aircraft, let's try together to work on making aviation greener and more durable. That is the challenge that companies like ours embrace, and especially with young people.

We tell them: help us invent the decarbonized aviation of tomorrow. You can either be spectators or become actors. And clearly it's working, since we still have many young people entering our industry, which remains very attractive in many ways.

To conclude: as you've understood, the coming years — particularly 2024 to 2028 — constitute a pivotal period for us. The success of the maturation of these technologies and the major demonstration and testing phases we will undertake during this period will, for decades to come, determine the performance level of aircraft and thus the effectiveness of decarbonizing air transport.

Innovation in aeronautical propulsion is indispensable for meeting the major challenges of this market. Current and future advances in propulsion technologies represent the keystone of our ability to create a more sustainable, high-performing, and competitive aviation. It is therefore imperative that our ecosystem remains at the forefront of this revolution to guarantee a prosperous future for the aeronautics industry. And it will remain so by being innovative, resilient, and always ambitious. Thank you for your attention, and I wish a very happy anniversary to the Academy.

Thank you.