Chief Executive Officer, Airbus SE
Airbus CEO Guillaume Faury on new tariffs with the EU
"We're indeed facing persistent problems on having engines in the right number at the right time, enabling our own production.
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 (11 segments)
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Narrator0:00
Curves. Curated upgrades. Elevated design for thoughtful living. Thuma.
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Interviewer0:09
The chief executive of the world's top aircraft maker, Airbus, has welcomed the new US-EU trade deal. The terms include a zero-for-zero tariff exemption for the aerospace industry. I spoke to Airbus chief executive Guillaume Faury about the deal.
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Guillaume Faury0:30
We are indeed happy to see that this is the way forward. We saw that in the agreement between the U.S. and the UK and, recently over the weekend, we heard that civil aviation parts and equipment and aircraft themselves will continue to be without tariffs. That was important for us, but it was important for the U.S. industry, for the European industry. And we are glad that this is the case moving forward.
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Interviewer1:00
As I look at your results, they are interesting. I mean, you are ramping up the commercial aircraft production, but there is still this line, particularly with the A320 family. We face persistent engine supply issues. My words, not yours. You must be getting fed up by this by now, because there doesn't seem to be resolution to a problem that's been around for too long.
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Guillaume Faury1:28
It's indeed frustrating for us. We've managed to bring the supply chain with us in this ramp up. We are producing at the right production rates on all our products. But on the A320 family, we cannot complete the production. We have to produce what we call gliders, meaning finished airplanes without engines, waiting for the engines to be delivered to us, and therefore having us delivering to the final customers. So indeed, it's frustrating. We are in interesting discussions with engine suppliers, CFM primarily, but also Pratt, expecting from them that they would recover later in the year. Both of those two engine manufacturers faced industrial issues in the first half of the year. So there are some specific reasons why they are late this year, but we are indeed facing persistent problems on having engines in the right number at the right time, enabling our own production.
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Interviewer2:36
Do you anticipate supply chain problems from your own production line, where we know there have been difficulties in the past, which have delayed aircraft deliveries?
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Guillaume Faury2:49
The main reason for aircraft delays in the past was difficulties in the supply chain, and we have worked heavily with our suppliers to get back on track. And today, with Airbus production capabilities and supply chain capabilities, we are where we want to be with one or two exceptions. The main exception is indeed engines for the single-aisle A320 family; the second one being Spirit, which is holding us back on the speed of ramp-up of the A220 and the A350. And you know that we are in the process of buying some Spirit AeroSystems work packages to secure the ability to ramp up on those two programs as well.
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Interviewer3:36
The vast majority of Airbus still remains the commercial division, but I notice if you look at the increase in revenues, it's defense that's really ramping up in some sense. How much more defense business do you think you're going to get as a result of the increase of European government spending on defense? We don't know precisely, we welcome the announcement of the increase of defense budgets from NATO countries moving forward.
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Guillaume Faury4:12
So we have a perspective. We understand much better the amount of money they will spend for defense. We don't know precisely program by program what it will look like. Now, this being said, we anticipate growth in defense. You know that we have the growth in commercial for the reason we discussed before, the ramp-up of commercial production. So all in all, we believe that the share of defense within Airbus turnover will remain roughly the same, roughly 20%, meaning defense will grow at the same speed or similar speed as commercial.
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Interviewer4:46
What's next in terms of aircraft? I look at the range. You've got a really good solid range of aircraft now. Hydrogen is obviously now off to one side in terms of next generation. But if you had to look at what you believe will be the next major project in commercial aviation, where are you going to put your firepower?
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Guillaume Faury5:12
Well, that's clear. We're focusing on the succession of the A320 family. It's a very successful product, but it's now a very mature product. So we have to look beyond the horizon. We're preparing the successor of the A320 that we intend to launch the program around 2030 for an entry into service of this product in the second half of the next decade. And this aircraft aims at reducing very significantly the fuel burn, contributing to reducing CO2 emissions with an aircraft capable of 100% use of sustainable aviation fuel. So we have a clear roadmap of what we want to bring, and that will come with a new propulsion system. We're cooperating with CFM on a program that they call the Rise engine, which is an open rotor for better fuel efficiency. But we're also working hard on improved wings, very significantly better efficiency on the wings of the future, reducing the weight by the use of new architecture, new materials. And these aircraft will obviously be more connected aircraft. The use of data and connectivity enables a lot of things, including...