00:00Let's talk about this target. You say that you're sticking to the target to deliver 180, 820 aircraft, that is, to customers this year.
00:09You've only delivered about 507 through September.
00:13So what gives you the confidence that you'll be able to hit those numbers come the end of 2025?
00:19The fact that we're fully prepared, that we're already close to end of October,
00:26and the fact that one of the reasons for being backloaded is the lack of availability of engines for our single aisle.
00:35We were with 60 gliders mid-year. We closed the third quarter down to 32 gliders,
00:43and we think we're going to have the engines we need to deliver those planes before the end of the year.
00:48So it's indeed a lot of work in the last quarter of the year, but we think we have the ingredients.
00:53We're prepared to come close to the 820 deliveries we have guided for.
00:59And would you say that the engines are still your biggest bottleneck at this moment?
01:04You mentioned the gliders, for example.
01:05I know you had to park some ready-made planes because of that engine issue.
01:10So is that the biggest issue, would you say, when it comes to the state of your supply chain?
01:15The majority of what we're delivering are the A320 family aircraft.
01:19And indeed, for those aircraft, the main bottleneck is the engine, is the engine availability from both CFM and Pratt.
01:28We were with a very difficult situation at mid-year.
01:31Things are improving.
01:32We think we're going to reach our numbers, as I said before, for 2025.
01:36But we will have persisting tensions on availability of engine in 26 and maybe in 27 as well.
01:42I am curious, Guillaume.
01:44I mean, we've heard from a lot of the major airline executives that have raised some concerns here about the backlog.
01:51In addition to just the general problems in getting those engines onto those gliders,
01:56there's now, at least here in the United States, the issue of a government shutdown that, of course, effectively brings to a halt
02:01or at least a slowdown in any sort of certification here.
02:04Have you had to address that at all so far?
02:07Not to a major extent.
02:11We are not significantly exposed to this situation.
02:15Again, the main challenges we have are really on the delivery of aircrafts, not on the certification of them.
02:22We have recently certified, I mean, last year, the XLR that's behind us.
02:28And the XLR, the A321 XLR, is a great airplane that is now in service.
02:33That's behind us.
02:34And the next certification moving forward will be for the A350 freighter.
02:39But that's not today a short-term bottleneck.
02:44We have to start flying with the aircraft.
02:47That will be the case in 2026.
02:49So certification is for later.
02:51We plan to enter into service in 2027.
02:54So we hope, in the meantime, we will be able to restart or to have appropriate and efficient certification work with the FAA.
03:05The primary certification authority is EASA.
03:07And we're currently working with EASA for preparing the certification file of the A350 freighter.
03:13With regards to your operations here in the United States, whether it has to do with the certification,
03:19whether it has to do with the shutdown or the broader issues, what are the deliveries,
03:25the timeline for deliveries coming out of the plant in Alabama?
03:30Well, Alabama is one of our production sites.
03:34You know that for the A320 family, we are now relying on mobile in the U.S., in Alabama,
03:41in Toulouse and Hamburg in Europe, and on Tianjin in China.
03:46For mobile, we have recently inaugurated the second final assembly line for the A320.
03:53So we are clearly ramping up proportionally more in the U.S. than in the rest of the world.
03:58And we have an A220 final assembly line.
04:01So mobile Alabama will soon become the fourth largest production site of commercial aircraft in the world.
04:08And it's a nervous site in the U.S.
04:10But basically, we're ramping up A320 globally towards the rate 75, and Mobile Alabama will take the chair.
04:19And you mentioned the A220.
04:21When it comes to your production target, you actually lowered that as well.
04:25And I would love a little bit more detail on what led to that decision
04:28and when, you know, we might see some of these supply chain challenges that you're dealing with
04:32be unsnarled when it comes specifically to that body.
04:35Yeah, well, I like to highlight the fact that we are not reducing production.
04:40We are reducing the speed of ramp up on the A220.
04:44We are actually doubling production roughly within two years, from 24 to 26.
04:51And we have decided to go from what we were anticipating for next year, that was rate 14, to actually rate 12.
04:58So moving up from rate 6 a few quarters ago, a few years ago, to the rate 12.
05:05We are on that trajectory.
05:06Things are moving forward quite well in 2025.
05:10But rate 12 is a challenging target.
05:13We have to integrate as well the work packages from Spirit on the A220, the wings and other smaller work packages.
05:20So we have a lot on our plate.
05:21We are also introducing progressively engine improvements to improve the durability of the engine for our customers.
05:29So a lot of work on the A220, very fast and steep ramp up.
05:34And we think that's good enough in terms of quantity of work and challenges moving from 25 to 26.
05:39I have to ask you about the defense business.
05:42Obviously, that was a bit of a boost for you in the most recent period, Guillaume.
05:45Is this a long-term story or a one-off?
05:48It's a mid-term story for sure, maybe a long-term one as well.
05:53You know that Europe has relied on the United States for a very long time when it comes to security of Europe.
06:00And we are now in different times.
06:03Europe is really ramping up in its ability to secure itself, to defend itself,
06:08which means significant increase in defense budgets for the main countries of Europe and the NATO members in Europe.
06:16So from that perspective, it's a mid-term or even long-term perspective.
06:21And on the short term, it comes with orders for more equipment, for development of new ones.
06:27And indeed, we have a tailwind when it comes to our numbers and our growth coming from defense against that backdrop.
06:34And we should also talk about your ambitions when it comes to space as well and to compete against Elon Musk's SpaceX.
06:42I know that you're merging some of your operation with regional peers, trying to create a regional venture.
06:47That project expected to be running in 2027, Guillaume.
06:51Would you anticipate, though, you might run into any sort of regulatory challenges here?
06:56Or is 2027 looking like a firm date?
06:58Well, we just signed a 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.
07:13So that's really good.
07:14We are not only willing to compete with SpaceX and Starlink.
07:19Obviously, that's a big player and a fast-moving player.
07:23But we are serving many other needs, including defense in Europe and across the world.
07:29That creates a company that has the potential to be very competitive, to serve the interest and the needs of the European players and more global players, as I said.
07:41We have to go through the regulatory process to the antitrust.
07:45That's something that is now ahead of us.
07:47Well, I think Europe has moved forward as well, understanding that it needs to be able to compete globally.
07:55And we hope that we will be supported for what we're doing.
07:58We have to demonstrate compliance with the European regulations and other regulations.
Be the first to comment