Chief Executive Officer, Airbus SE
Airbus CEO Guillaume Faury Talks Earnings, Delivery Delays | Bloomberg Talks
Airbus CEO Guillaume Faury tells Katie Greifeld and Romaine Bostick on “The Close” that Airbus expects to meet engine targets ...
About Guillaume Faury
Guillaume Faury, CEO of Airbus, stated at the Farnborough International Air Show that the company aims to launch its next-generation single-aisle aircraft in 2030, with entry into service in the second part of the following decade. He said the aircraft would offer a fuel burn benefit of around 25%. Faury noted that aircraft demand remains strong, with a backlog of more than 9,200 aircraft, and that the conflict in the Middle East is increasing demand for fuel-efficient aircraft due to high oil prices. He reaffirmed that Airbus would reach a production rate of 75 aircraft per month. Regarding defense, Faury commented that Europe wants to rearm and become more self-sufficient, which he said is also expected by the United States within NATO. He called for better collaboration on defense spending in Europe, stating that it is important for money to be "well spent in Europe" through partnerships.
Transcript (15 segments)
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Interviewer0:02
Bloomberg Audio Studios, podcasts, radio, news. Let's talk about Airbus shares just barely finishing the day in the green. That's after they reported third-quarter adjusted EBIT that beat estimates. But it's not all good news. The CEO also sounding the warning bell that Airbus deliveries remain very backloaded. I'm pleased to say that that CEO joins us now. His name is Guillaume Faury. He is the CEO of Airbus. Guillaume, great to have you with us. Let's talk about this target. You say that you're sticking to the target to deliver 820 aircraft to customers this year. You've only delivered about 57 through September. So, what gives you the confidence that you'll be able to hit those numbers come the end of 2025?
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Guillaume Faury0:48
The fact that we're fully prepared, that we're already close to end of October, and that one of the reasons for being backloaded is the lack of availability of engines for our single aisle. We were with 60 gliders mid year, we closed the third quarter being down to 32 gliders, and we think we're going to have the engines we need to deliver those planes before the end of the year. So it's indeed a lot of work in the last quarter of the year, but we think we have the ingredients. We're prepared to come close to the 820 deliveries we have guided for.
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Interviewer1:27
And would you say that the engines are still your biggest bottleneck at this moment? You mentioned the gliders for example. I know you had to park some readymade planes because of that engine issue. So is that the biggest issue would you say when it comes to the state of your supply chain?
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Guillaume Faury1:43
The majority of what we're delivering are the A320 family aircraft, and indeed for those aircraft the main bottleneck is the engine availability from both CFM and PRA. We were with a very difficult situation at mid year. Things are improving. We think we're going to reach our numbers as I said before for 2025, but we will have persisting tensions on availability of engine in 2026 and maybe in 2027 as well.
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Interviewer2:11
I am curious, Guillaume, I mean we've heard from a lot of the major airline executives that have raised some concerns here about the backlog. In addition to just the general problems in getting those engines onto those gliders, there's now, at least here in the United States, the issue of a government shutdown that of course effectively brings to a halt or at least a slowdown in any sort of certification here. Have you had to address that at all so far?
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Guillaume Faury2:37
Not to a major extent. We are not significantly exposed to this situation. Again, the main challenges we have are really on the delivery of aircraft, not on the certification of them. We have recently certified, I mean last year the XLR, that's behind us, and the A321 XLR is a great airplane that is now in service. That's behind us, and the next certification moving forward will be for the A350 freighter. But that's not today a short-term bottleneck. We have to start flying with the aircraft. That will be the case in 2026. So certification is for later. We plan entry into service in 2027. So we hope that in the meantime we will be able to restart or have appropriate and efficient certification work with the FAA, the primary certification authority EASA. And we're currently working with EASA for preparing the certification file of the A350 freighter.
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Interviewer3:44
What are the deliveries, the timeline for deliveries coming out of the plant in Alabama?
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Guillaume Faury3:58
Alabama is one of our production sites. You know that for the A320 family, we are now relying on Mobile in the US in Alabama, in Toulouse and Hamburg in Europe, and in Tianjin in China. For Mobile, we have recently inaugurated the second final assembly line for the A320. So we are clearly ramping up proportionally more in the US than in the rest of the world. And we have an A220 final assembly line. So, Mobile, Alabama will soon become the fourth largest production site of commercial aircraft in the world. And it's a site in the US. But basically, we're ramping up A320 globally towards the rate 75, and Mobile Alabama will take.
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Interviewer4:47
And you mentioned the A220. When it comes to your production target, you actually lowered that as well. And I would love a little bit more detail on what led to that decision and when we might see some of these supply chain challenges that you're dealing with be sorted when it comes specifically to that body.
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Guillaume Faury5:04
I'd like to highlight the fact that we are not reducing production. We are reducing the speed of ramp up on the A220. We are actually doubling production roughly within two years from 24 to 26. And we have decided to go from what we were anticipating for next year that was rate 14 to actually rate 12. So moving up from rate six a few quarters ago, a few years ago, to rate 12. We are on that trajectory. Things are moving forward quite well in 2025. But rate 12 is a challenging target. We have to integrate as well the work packages from Spirit on the A220, the wings and other smaller work packages. So we have a lot on our plate. We're also introducing progressively engine improvements to improve the durability of the engine for customers. So a lot of work on the A220, a very fast and steep ramp up, and we think that's good enough in terms of quantity of work and challenges moving from 2025 to 2026.
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Interviewer6:08
I have to ask you about the defense business. Obviously that was a bit of a boost for you in the most recent period. Guillaume, is this a long-term story or a one-off?
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Guillaume Faury6:17
It's a midterm story for sure, maybe a long-term one as well. You know that Europe has relied on the United States for a very long time when it comes to security of Europe, and we are now in different times. Europe is really ramping up in its ability to secure itself, to defend itself, which means a significant increase in defense budgets for the main countries of Europe and the NATO members in Europe. So from that perspective, it's a midterm or even long-term perspective. And on the short term, it comes with orders for more equipment, for development of new ones. And indeed, we have a tailwind when it comes to our numbers and our growth coming from defense against that backdrop.
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Interviewer7:02
And we should also talk about your ambitions when it comes to space as well and to compete against Elon Musk's SpaceX. I know that you're merging some of your operation with regional peers trying to create a regional venture. That project expected to be running in 2027. Guillaume, would you anticipate though you might run into any sort of regulatory challenges here or is 2027 looking like a firm date?
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Guillaume Faury7:27
We just signed the memorandum of understanding with Thales and Leonardo to create that European player that is able to, or will be able to, compete at scale on the global competitive landscape. So that's really good. We are not only willing to compete with SpaceX and Starlink. Obviously that's a big player and a fast-moving player, but we are serving many other needs including defense in Europe and across the world. That creates a company that has the potential to be very competitive to serve the interests and the needs of the European players and more global players. As I said, we have to go through the regulatory process, the antitrust. That's something that is now ahead of us. I think Europe has moved forward as well, understanding that it needs to be able to compete globally. And we hope that we will be supported for what we're doing. We have to demonstrate compliance with the European regulations and other regulations. We're starting that work now.
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Interviewer8:32
All right, Guillaume, really appreciate you taking time for us. The CEO of Airbus there, Guillaume Faury, on the heels of the earnings just out most recently.