Airbus CEO Guillaume Faury discussed future commercial aircraft programs, European defense spending, satellite consolidation and more in an interview with Aviation Week Executive Editors Jens Flottau and Robert Wall.
AW&ST: What drove the recent change to your senior management team by appointing Rémi Maillard as the new head of engineering and focusing Chief Technology Officer Sabine Klauke on digital projects? This management team has the unique responsibility to prepare for launching the product that will replace the A320. You know the time frame: launch of the program roughly by the end of this decade and then entry into service in the second half of the next decade. We do not only need the right technologies, partners and architecture, but also the right skills. There are other changes that are maybe less visible but that also go in the same direction. As we come closer to the launch of our new product, we want to be fully digitalized with our design of products, production systems, and support and services.
We want to benefit from what Sabine knows, with her breadth of competencies. She is a manufacturing engineer by background. She is fully concentrating on that part of preparing the next-generation aircraft. And Rémi has an engineering background, has spent time in India and broadened his experience in commercial aviation. We are bringing him back into engineering because of his expertise in product design at a moment when this is what engineering will have to focus on.
Boeing CEO Kelly Ortberg told us in a recent interview that he believes the market and technology are not ready for a next-generation single-aisle—and neither is Boeing (AW&ST June 2-15). Do you agree with him on the first two points? The market is not calling for a new plane for entry into service now. It is digesting the entry into service of new models including the XLR, certified less than a year ago. The airlines are looking for the on-time delivery of products they ordered a long time ago, and you know we are struggling with the state of the supply chain. Development of a new product would just add complexity.
But if we look at the second half of the next decade, 12-13 years from now, the market will not only be ready for it, but it will be calling for it. The market will be looking for more fuel and cost efficiency. This would be around 20 years after the entry into service of the Neo, so at the right point in time. To be able to launch around 2030, we have to prepare the technologies now—not only the technologies, but also the industrial means, the digitalization. I don't disagree that the technologies are not ready now; that is why we are working hard on them.
To be able to launch in 2030, you would need to select an engine around 2027. That is a fair assessment. The [CFM International Revolutionary Innovation for Sustainable Engines] RISE studies are moving forward. We need to make sure it is a winning bet. We work a lot, challenging each other in a very positive sense, making sure there is no stone unturned. There is uncharted territory for an engine of that size. You will see prototypes flying, demonstrators validating specific technologies, and the engine will fly before we finally select it. Around 2027 will be when the selection of open rotor or geared turbofan is frozen.
If you went for RISE, it is highly likely you would go for only one engine type. Is that a worry? I'm not sure I would use the word “worry.” It is a dimension that we need to fully understand and accept. We prefer a solution with two engine options. But the Boeing 737 has been successful with one engine for a long period of time. We have a very successful A350 program with one engine type. You also have only one on the 777X. So both models can work. You either select one engine for the market or you do a competition in the market where you have two engine options, and airlines select one or the other. If we go for the RISE engine, it would mean we consider its performance will offset having two manufactures competing.
Would you consider an update of the A320 family, such as the proposed A322, a rewinged, reengined stretch? We are really serious about the successor to the A320, and therefore we don't want to be distracted. Never say “never,” but it will most likely not be the case, particularly if we stick to our plan to launch the A320 successor at the turn of the decade.
To touch on other parts of your business, how will Airbus need to adjust to benefit from the European defense spending wave that is unfolding? In 2024, both Airbus Defense and Space and [Airbus] Helicopters achieved record bookings, significantly higher than the turnover. We are on the growth path, but relying quite a lot on exports. We have not yet seen the orders connected to ReArm Europe—this trend of the European countries investing significantly more.
NATO will share with member countries their new capability targets somewhere in the middle there. That will give clarity to those nations on their capability gaps and where they will have to bridge. . . . And that's the moment where we expect to have clarity on where it will make sense to invest, in the sense of preparing the production systems or contracting, or maybe investing in some R&D capabilities—either new or existing capabilities.
In other words, we are not yet doing this, but we think that's probably the type of analysis we will be making in the second half of this year.
You have been quite clear that the dwindling A400M backlog is a concern. How long do you have to book more orders? We are delivering 8-10 aircraft a year. We had 48 aircraft in the backlog at the end of last year, so we need to book 8-10 planes per year. I think that's most likely what we will see coming. We have a lot of conversations around the A400M with the partner countries, with export countries in Europe and outside of Europe. And the ones that are NATO members are having those conversations: How many will we need by when? What will the capability targets be? Based on those discussions, I think that will be coming. We have visibility for the next 3-4 years.
So how much time do you have? Sort of a year, which is not a lot. But given the speed at which things are happening, I think it's more than enough.
The U.S. market has been a challenge for you, but you have had some success with the UH-72 and satellites for the Space Development Agency. Is there a way for you to play in the Golden Dome? Not significantly. Let's be realistic: It's very sovereign. And it will be exclusively—or if not exclusively, in its vast majority—going to U.S. manufacturers, even if we would have the capabilities to contribute.
Not to sound impatient, but the talks with Leonardo and Thales around consolidating satellite activities have been dragging on. I'm impatient as well. I would love this to go faster. Those types of things take some time. We have to agree on the frame and the objectives, and then we have to start to be more specific on what the project should look like, what the end result should look like, what the governance will look like. And when we have agreed on the most important high-level things, then we have to go into the details. And the devil is in the details—in those activities, there are plenty of details.
And then we have to engage with stakeholders. There is some sovereign dimension. There's also reaching out to commercial customers. Then you have antitrust authorities. We are mostly consistent with the timeline we had given to ourselves nine months ago.
Do you feel you are on a path to a handshake on a deal? You are not there until the point when you are there. And the last mile can be long. I think the commitment of the three parties is very strong. We share the common understanding that this joint venture will be much stronger than the sum of the parts. That scale in the space business today is a key driver of speed, of competitiveness in terms of capabilities and in terms of cost. The game now is global, with very strong players in the U.S., with very strong players in China. Even if they play mostly on the domestic market, one day they will come to the export market. Therefore, we have no time to lose.
Back to commercial, the [Boeing] 777X has had some considerable sales success in the Middle East in particular. Do you feel the need to offer a further stretch of the A350? I am not sure that they have such a great success with the 777X. They are so late. We have to look at things with prudence in my view. The 777X is a slightly larger product than the A350-1000, so it is a natural question. The -1000 is in service, and we are ramping up production. It serves a large share of the widebody market successfully, and we have more demand than supply. So we don't feel the need to do something more that would create more diversity of products when ramp-up capacity is limited. In the short term, there is no need to make the product range more complex and not get the benefits because we are limited by supply.
At a later stage, it will probably be a natural evolution of the product line to continue to increase capacity from the -900 to the -1000 to something slightly longer, bigger, with more capabilities that will come close to the 777X in terms of seat count. We always look at the product range with growth potential. In the short term, this could be counterproductive.
Would an A350 stretch be the opportunity to introduce “Neo” versions, too? Honestly, I don't have the answer, but that is sometimes what we do to combine a change of engines with a new variant.
Are you confident about Rolls-Royce's commitment on the Trent XWB-97 upgrades needed for harsh environments that Emirates, among others, has demanded? We have strong demand for the -1000 anyway. Rolls-Royce is in the process of an upgrade for the engine that will respond to the ask of customers, specifically Emirates, that are flying hot, high and sandy. These are the most challenging conditions for the durability of engines, and [the upgrades] would ease that side of the equation. But the world is bigger. We have strong demand for the -1000. Actually, the mix of the -1000 versus the -900 is larger than what we had designed at the launch of the program.
It seems like you are moving closer to making a decision on the A220 stretch. How close are you? Those decisions are not made until they are made. The last mile is sometimes very long, and sometimes you do not reach the destination. Nothing is planned in the short term, and beyond the short term, there is uncertainty. We are ramping up the -100 and -300; we have not commercialized anything else.
Do you think you have a good plan for how to deal with tariffs, or are they changing too often to even have a plan? It is unfortunately more of the latter. You have a plan until you have to change the plan. You have to adapt, be agile, try to understand what is the nature of the game, to engage with the supply chain, the customers, discuss and decide what is best for the moment. And honestly, the most difficult part to appreciate is whether this is a short-term game that will go back to something close to what we had before the 1979 agreement on no tariffs, which was so favorable to aerospace in the U.S. and Europe, or whether the result will be materially different and will structurally change the industry. We are adapting to the short-term changes as they come.
But you are in favor of retaliatory tariffs if the U.S. sticks to its position. We don't like tariffs, we as an industry. We are a European player, but we are also a U.S. player, to a certain extent, and speaking to our U.S. colleagues, they also suffer from the tariffs. We believe the tariffs are lose-lose for the Western-North Atlantic aerospace ecosystem that we are a part of, and that the endgame should be no tariffs. The way to get there is rather complex. And if there is no reaction on the U.S. side in applying tariffs in Europe, at a point in time, there must be a new status quo to force a negotiation.
What we observed five years ago, when there were tariffs on Airbus planes going to the U.S. against the backdrop of the [World Trade Organization] ruling, it took 15 months for the EU to apply tariffs on Boeing planes, and that was the way to bring the two parties to the table and get to a resolution. I believe, indeed, that if it is not possible to get to an agreement by negotiation and by being rational, there must be a symmetrical response. Nobody can pretend there was imbalance in trade conditions, because there is a trade agreement that says zero tariffs for everyone.
Are you concerned about the impact on the supply chain? I am concerned. As long as tariffs are reasonably modest, it is probably manageable, but it is a lot of work because the supply chain is very complex, deep and cross-border, thanks to the 1979 agreement. I was really worried about the 145% tariffs against China, the 125% retaliation, because that potentially could have stopped deliveries and created bottlenecks, stalling deliveries of certain parts. We are back to levels that are less toxic. We have not identified an area of jamming in the supply chain, and we are working hard to check that there is none. But indeed, with very high tariffs, you might create real problems. I am a bit worried about what would happen if the tariffs were raised significantly above 10%.
How fast will you be able to integrate the Spirit [AeroSystems] sites? We will have turned them around within 2-3 years, but it is a site-by-site situation that we need to manage.
What's your view on mergers and acquisitions (M&A) right now? We need to create scale in certain areas of the business where scale has not yet been achieved. We have scale in Airbus Commercial. We have scale in Helicopters. We have scale in missiles with MBDA. And the priority now is to create scale where we don't have scale. We created scale in combat with Eurofighter. Finding the keys to a future combat air system—what kind of combination of sharing with [the UK-Italian-Japanese Global Combat Air Program] GCAP in Europe moving forward, what is the way of getting there—remains a question. And on space, on satellites, we are working hard to create that scale.
I'm not suggesting we would not do M&A, but these are a more, small tactical bolt-on things we can add to our cybercapabilities, to our [command and control] here and there. We did it a bit on helicopters. But the priority is getting scale, especially in the European landscape, where we are very fragmented. Where we create scale, generally speaking, we compete well with our U.S. or non-U.S. competitors. That's the way I'm thinking of the priorities for Airbus.