Airbus CEO on Demand, Tariffs Impact, European Defense

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00:00Is it going to be a quiet show? There's so many things going on at the moment.

00:03Does that put a little bit of a cloud over what's going to happen here?

00:05I think the accident last week, obviously, was a very tragic event.

00:10We're all working hard in this industry for this not to happen,

00:13so when it happens, it's a big setback.

00:16But yes, we have a slow start in the show, but I think it will be a good show.

00:21As you rightly said, plenty of uncertainties and difficulties,

00:25but also some mega trends, more and more people travelling,

00:28very strong demand for air travel, and therefore a lot of activity for our industry.

00:33You talk about the uncertainty. Thomas, your CFO, was saying the other day,

00:36I think it was on Friday, talking about the idea that maybe there isn't the visibility on buybacks right now

00:41because of the uncertainty that exists right now within the industry.

00:44How much uncertainty is there? How much visibility do you have?

00:47How confident are you in the targets you're setting yourself right now?

00:50Well, we have plenty of contradictions to manage.

00:52We have a very strong backlog of signed contracts,

00:55customers expecting those aircraft to be delivered,

00:58so we have pressure on deliveries.

01:00We have a challenging situation for supply chain coming out of COVID,

01:05now with the uncertainties on trade and also on conflicts around the world.

01:09So we're pushing hard to be able to fulfill our obligations to other customers.

01:14They count on us.

01:14But it's an uncertain world, so we have to also to...

01:19Is it getting more uncertain or less uncertain?

01:21I think it's a contradiction. It's full of contradictions.

01:24Mega trends are there. Demand for air travel is there.

01:28That's a fact. It's growing.

01:30So we have to serve that demand.

01:32But on the other hand, yes, on the short term,

01:34on the supply chain management,

01:36on the way conflicts are impacting the supply chain

01:41and our ability to do business, it's becoming more challenging.

01:44So there's probably more difficulties to do business.

01:46Right.

01:47But the reasons, the fundamentals of business are very strong.

01:51What are the challenges right now?

01:52What do you not have enough of?

01:54We've talked in the past about engines.

01:55Do you not have enough of those?

01:56Seats? Toilets?

01:58Where is it right now that you're facing the challenges right now?

02:01I mean, the uncertainties that are weighing on us are trade.

02:04Yep.

02:04Obviously, tariffs.

02:06What is the next steps?

02:08What is going to happen with tariffs?

02:09Is it going down, escalating?

02:12What do you think?

02:13Is it going down or is it escalating?

02:14We don't know.

02:15So we have to make different scenarios.

02:17What do you think is going to happen?

02:18We have to make different scenarios

02:19and be resilient to different scenarios.

02:21It's not about thinking.

02:22It's about preparing.

02:23It's about being resilient.

02:25That's the world we're living in.

02:26Then you have the security conflicts around the world

02:29which are impacting ability to fly over certain zones.

02:34That's difficult for airlines.

02:35That is impacting the willingness of some areas of the world

02:39to travel to other areas of the world.

02:41Then you have the U.S.-China tensions which are not helping.

02:45So when it comes to our supply chain,

02:47a lot of things have improved, especially compared to last year.

02:50We have by far less critical issues,

02:52but the remaining ones are big ones.

02:54As you know, on the single aisle, we have gliders,

02:57so meaning we have airplanes fully ready to be delivered without engines.

03:02We have an engine crisis on our single-air aircraft,

03:05and that's really what we're trying to solve with our friends from CFM.

03:10Boeing has a new head of sales.

03:12His name is Donald Trump.

03:13He is the president of the United States.

03:15And it seems as if the message coming at the moment is

03:18you order a bunch of Boeing airplanes,

03:20you are going to get a better trade deal.

03:22Where's the muscle in Europe?

03:24Where's the political backing?

03:26The prime minister is going to be here a little bit later on today.

03:29You're going to be greeting him.

03:30Where's the political muscle that you need

03:33to be able to compete with what is happening with Boeing

03:38and the president of the United States?

03:40We like the power of our products.

03:43At Airbus, we are passionate about techniques,

03:46about supporting what our customers need

03:49with the right product, the right customer support as well.

03:53And we have also a good sales guy at Airbus,

03:56probably less known than Trump from the public,

04:00but well-known in the industry.

04:02So we are trying to promote our products on their own merits.

04:05But do you need political backing?

04:06Is that what this is going to come down to?

04:07It feels like an increasingly political story,

04:10less about product, more about politics.

04:12It plays a big role.

04:13Politics plays a big role.

04:15So we have to be even better.

04:17And that's what we're trying to achieve with our products, again,

04:21making sure that customers select Airbus planes

04:25on the merits of the planes.

04:27As I say, you are the president of GIFAS as well.

04:30Let's talk a little bit about kind of what is happening here in Europe.

04:33I've talked to you in the past about the idea

04:34that we need a kind of Airbus of defense.

04:36We need consolidation.

04:37We're going to see some consolidation maybe in the space industry.

04:39Talk to me, when the prime minister comes,

04:42when the president comes, when he comes back from the G7,

04:45again, what is the message here in terms of

04:47what needs to happen in Europe on the defense side?

04:49And do you believe that the budgets are there?

04:52The deficits in Europe, apart from Germany, are enormous right now.

04:55Can Europe afford to rearm in the way that it needs to,

04:58to deliver the kind of defense industrial complex

05:01that it needs to deliver if it wants to defend itself right now?

05:03I think Europe has understood, and most of the large countries of Europe,

05:08that they need to step up in defense,

05:09that Europe needs to take care of its own security,

05:12and that they will be, in the future,

05:14they will get less support from the United States

05:17because the U.S. have made clear

05:19that Europe has to take care of their own security.

05:22And we have security issues at the border of Europe,

05:26with Ukraine and Russia.

05:28So I am convinced that the countries of Europe know

05:32that they have to step up, they will put more money,

05:35they will spend more money in Europe.

05:37You think the money's there? Are you confident the money's there?

05:39The money will be coming.

05:40We see the early signs, but very strong and clear signals,

05:44that the money will be coming, that the budgets are increasing.

05:47Probably not as fast as what is publicly said,

05:51but it's going to come.

05:52Germany will be very committed.

05:54Other countries will be committed.

05:55So money will come.

05:57There will be more money going to security.

06:00The money will be spent in Europe more than in the past.

06:03In the past, the majority of the money spent for defense acquisition

06:07was spent to non-EU companies, mostly U.S. companies.

06:13This will change progressively.

06:15And the money will be spent more wisely,

06:17with more corporations, creating scale.

06:20And as you know, we at Airbus are experts in creating that scale.

06:25We did it in commercial aviation, in helicopters, as well in missiles,

06:29with our contribution to MBDA.

06:31And we are currently working to create scale in satellite manufacturing and services

06:35with our competitors, with our friends from Thales and Leonardo.

06:38When does that get announced?

06:39When are we going to see that deal?

06:40Well, that's something we have already explained.

06:43We are moving forward into the steps of discussing with authorities for the antitrust

06:48and creating the case together.

06:51So it will come later in the year.

06:53But that's something we are very focused on, creating scale in space.

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