1 00:00:02,320 --> 00:00:06,680 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:06,880 --> 00:00:07,600 Speaker 2: Good morning, Lizzie. 3 00:00:07,640 --> 00:00:09,480 Speaker 1: Yeah, let's just set the scene. 4 00:00:09,440 --> 00:00:12,160 Speaker 2: As we start the Paris Show this year. As you say, 5 00:00:12,200 --> 00:00:14,480 Speaker 2: it is likely to be affected by a number of 6 00:00:14,480 --> 00:00:16,720 Speaker 2: external factors. The most obvious one, of course, is what 7 00:00:16,760 --> 00:00:19,600 Speaker 2: has just happened in India. That means that the CEO 8 00:00:19,760 --> 00:00:22,680 Speaker 2: Boeing is not going to be here. It obviously casts 9 00:00:22,680 --> 00:00:25,440 Speaker 2: a very long shadow over events at the show. You've 10 00:00:25,480 --> 00:00:27,040 Speaker 2: also got the conflict in the Middle East as well, 11 00:00:27,040 --> 00:00:28,720 Speaker 2: and that's going to cast a long shadow as well. 12 00:00:28,920 --> 00:00:30,840 Speaker 2: Maybe some of the news, some of the some of 13 00:00:30,880 --> 00:00:32,760 Speaker 2: the news, some of the announcements that we were expecting 14 00:00:32,760 --> 00:00:35,520 Speaker 2: coming from the show may not appear, may get pushed 15 00:00:35,560 --> 00:00:37,600 Speaker 2: a little bit to the right, maybe coming a little 16 00:00:37,600 --> 00:00:40,600 Speaker 2: bit later. So there's a number of factors that are 17 00:00:41,080 --> 00:00:43,760 Speaker 2: impacting the show that are obvious, but there's a number 18 00:00:43,760 --> 00:00:45,919 Speaker 2: of factors that are still impacting. What is happening within 19 00:00:46,000 --> 00:00:49,360 Speaker 2: airspace more broadly that has maybe slightly longer in duration. 20 00:00:49,640 --> 00:00:52,240 Speaker 2: There's still a supply chain problem. We're still worrying about 21 00:00:52,280 --> 00:00:54,680 Speaker 2: what is happening with the Tarist store. We don't understand 22 00:00:54,760 --> 00:00:57,880 Speaker 2: yet what the visibility around that all looks like. And 23 00:00:57,960 --> 00:01:00,480 Speaker 2: there's also the factor of the dollar as well. The 24 00:01:00,520 --> 00:01:02,680 Speaker 2: depreciating dollar is something you need to bear in mind. 25 00:01:03,000 --> 00:01:05,800 Speaker 2: When an industry prices most of its products in dollars 26 00:01:05,840 --> 00:01:07,959 Speaker 2: and you see a significant change, that is a factor. 27 00:01:08,120 --> 00:01:10,480 Speaker 2: So there's a lot to talk to Gillon Fouri about. 28 00:01:10,520 --> 00:01:13,640 Speaker 2: He is, of course the president of GIFAS these French 29 00:01:13,760 --> 00:01:17,160 Speaker 2: Aerospace Association. He's hosting this event. He is, of course 30 00:01:17,160 --> 00:01:20,120 Speaker 2: as well the CEO of air Bus. 31 00:01:20,120 --> 00:01:21,360 Speaker 1: Good morning, Good morning. 32 00:01:21,560 --> 00:01:23,000 Speaker 2: Is it going to be a quiet show that there's 33 00:01:23,040 --> 00:01:24,800 Speaker 2: so many things going on at the moment? Does that 34 00:01:24,840 --> 00:01:26,760 Speaker 2: put a little bit of a cloud over what's going 35 00:01:26,800 --> 00:01:27,319 Speaker 2: to happen here? 36 00:01:27,360 --> 00:01:30,840 Speaker 3: I think the accident last week obviously was a very 37 00:01:30,880 --> 00:01:34,200 Speaker 3: targic event. We're all working hard in this industry for 38 00:01:34,319 --> 00:01:37,360 Speaker 3: these not to happen, or when it happens, it's a 39 00:01:37,360 --> 00:01:40,880 Speaker 3: big setback. But yes, we have a slow start indus show, 40 00:01:41,319 --> 00:01:43,240 Speaker 3: but I think it will be a good show, as 41 00:01:43,280 --> 00:01:46,600 Speaker 3: you rightly say that, plenty of uncertainties and difficulties, but 42 00:01:46,640 --> 00:01:50,320 Speaker 3: alsow some mega trends, more and more people traveling, very 43 00:01:50,320 --> 00:01:53,360 Speaker 3: strong demon for air travel and the lot of activity 44 00:01:53,360 --> 00:01:54,040 Speaker 3: for our industry. 45 00:01:54,640 --> 00:01:55,640 Speaker 1: You talk about the uncertainty. 46 00:01:55,680 --> 00:01:57,600 Speaker 2: Thomas, your CFO, was saying the other day, I think 47 00:01:57,600 --> 00:02:00,120 Speaker 2: it was on Friday, talking about the idea that maybe 48 00:02:00,920 --> 00:02:03,280 Speaker 2: there isn't the visibility on buybacks right now because of 49 00:02:03,320 --> 00:02:05,960 Speaker 2: the uncertainty that exists right now within the industry. How 50 00:02:06,000 --> 00:02:08,600 Speaker 2: much uncertainty is that? How much visibility do you have? 51 00:02:08,680 --> 00:02:11,240 Speaker 2: How confidence are you in the targets you're setting yourself 52 00:02:11,320 --> 00:02:11,720 Speaker 2: right now? 53 00:02:11,840 --> 00:02:14,520 Speaker 3: Well, we have plenty of contradictions to manage. We have 54 00:02:14,560 --> 00:02:18,839 Speaker 3: a very strong backlog of sign contracts, customers expecting those 55 00:02:18,840 --> 00:02:22,000 Speaker 3: aircraft to be delivered, so we have pressure on deliveries. 56 00:02:22,040 --> 00:02:25,560 Speaker 3: We have a challenging situation for supply chain coming out 57 00:02:25,600 --> 00:02:28,600 Speaker 3: of COVID now with the uncertainties on trade and also 58 00:02:28,639 --> 00:02:29,959 Speaker 3: on conflicts around the world. 59 00:02:30,840 --> 00:02:31,960 Speaker 1: So we're pushing hard to. 60 00:02:31,919 --> 00:02:35,200 Speaker 3: Be able to fulfill our obligations to our customers. 61 00:02:35,440 --> 00:02:38,839 Speaker 1: They count on us. But it's a certain world, so 62 00:02:39,480 --> 00:02:42,519 Speaker 1: we have also to getting more and certain less. 63 00:02:43,160 --> 00:02:46,080 Speaker 3: I think it's a contradiction. It's full of contradictions. Mega 64 00:02:46,160 --> 00:02:50,520 Speaker 3: trends are there. Demand for air travel is there. That's 65 00:02:50,560 --> 00:02:53,760 Speaker 3: the fact it's growing, so we have to serve that demand. 66 00:02:54,000 --> 00:02:56,160 Speaker 3: But on the other hand, is on the short term 67 00:02:56,520 --> 00:02:59,880 Speaker 3: on the supply chain management on the way conflicts are 68 00:02:59,880 --> 00:03:04,160 Speaker 3: in impacting the supply chain and our ability to do business. 69 00:03:04,440 --> 00:03:07,680 Speaker 3: It's becoming more challenging. So there's probably more difficulties to 70 00:03:07,720 --> 00:03:11,200 Speaker 3: do business, but the reasons, the fundamentals of business are 71 00:03:11,280 --> 00:03:11,760 Speaker 3: very strong. 72 00:03:12,960 --> 00:03:14,919 Speaker 1: What are the challenges right now? What do you not 73 00:03:15,000 --> 00:03:15,480 Speaker 1: have enough of? 74 00:03:15,680 --> 00:03:17,280 Speaker 2: I will talked to the past, like engines, you don't 75 00:03:17,320 --> 00:03:21,160 Speaker 2: have enough about seats toilets. Where is it right now 76 00:03:21,160 --> 00:03:22,680 Speaker 2: that you're facing the challenges right? 77 00:03:22,960 --> 00:03:26,080 Speaker 3: I mean the uncertainties that are weighing on us are trade. 78 00:03:26,320 --> 00:03:27,440 Speaker 3: Obviously tariffs. 79 00:03:27,600 --> 00:03:29,600 Speaker 1: What is the next steps? 80 00:03:29,639 --> 00:03:36,240 Speaker 3: What is going to happen with tariffs going down, escalating, escalating? 81 00:03:36,440 --> 00:03:36,960 Speaker 2: We don't know. 82 00:03:37,040 --> 00:03:38,880 Speaker 1: So we have to make different scenarios. What do you 83 00:03:38,880 --> 00:03:39,680 Speaker 1: think is going to happen? 84 00:03:39,960 --> 00:03:42,320 Speaker 3: We have to make different scenarios and be resilient to 85 00:03:42,360 --> 00:03:45,360 Speaker 3: different scenarios. It's not about thinking, it's about preparing, It's 86 00:03:45,360 --> 00:03:48,480 Speaker 3: about being resilient. That's the world we're living in. Then 87 00:03:48,520 --> 00:03:51,720 Speaker 3: you have the security conflicts around the world which are 88 00:03:51,760 --> 00:03:55,160 Speaker 3: impacting ability to fly over certain zones. 89 00:03:55,640 --> 00:03:57,120 Speaker 1: That's difficult for airlines. 90 00:03:57,400 --> 00:04:00,560 Speaker 3: That is impacting the willingness of some areas of the 91 00:04:00,560 --> 00:04:03,080 Speaker 3: world to travel to other areas of the world. Then 92 00:04:03,120 --> 00:04:06,400 Speaker 3: you have the US China tensions which are not helping. 93 00:04:06,640 --> 00:04:09,080 Speaker 3: So when it comes to our supply chain, a lot 94 00:04:09,160 --> 00:04:11,880 Speaker 3: of things have improved, especially compared to last year. We 95 00:04:11,920 --> 00:04:15,000 Speaker 3: have by far less critical issues, but the remaining ones 96 00:04:15,040 --> 00:04:17,479 Speaker 3: are big ones. As you know, on the single line, 97 00:04:18,000 --> 00:04:21,359 Speaker 3: we have gliders so wening, we have airplanes fully ready 98 00:04:21,400 --> 00:04:24,799 Speaker 3: to be delivered without engines. We have an engine crisis 99 00:04:24,839 --> 00:04:28,119 Speaker 3: on our single aircraft and that's really what we're trying 100 00:04:28,120 --> 00:04:31,240 Speaker 3: to solve with our friends from CFM. 101 00:04:31,760 --> 00:04:34,640 Speaker 2: Boeing has a new head of sales. Okay, his name 102 00:04:34,680 --> 00:04:37,040 Speaker 2: is Donald Trump. He's the President of the United States, 103 00:04:37,160 --> 00:04:39,240 Speaker 2: and it seems as if the message coming at the 104 00:04:39,240 --> 00:04:42,039 Speaker 2: moment is you order a bunch of Boeing airplanes, you 105 00:04:42,080 --> 00:04:44,520 Speaker 2: are going to get a better trade deal. Where's the 106 00:04:44,600 --> 00:04:48,279 Speaker 2: muscle in Europe? Where's the political backing? The Prime Minister 107 00:04:48,360 --> 00:04:49,560 Speaker 2: is going to be here a little bit later on 108 00:04:49,600 --> 00:04:53,200 Speaker 2: today you're going to be greeting. Where's the political muscle 109 00:04:54,400 --> 00:04:58,600 Speaker 2: that you need to be able to do to compete 110 00:04:58,600 --> 00:05:00,680 Speaker 2: with what is happening with buying and the President of 111 00:05:00,680 --> 00:05:01,840 Speaker 2: the United States. 112 00:05:02,040 --> 00:05:05,760 Speaker 3: Right, we like the power of our products at ebers. 113 00:05:05,800 --> 00:05:10,919 Speaker 3: We are passionate about techniques about supporting what our customers 114 00:05:11,000 --> 00:05:14,400 Speaker 3: need with the product, the right customer support as well, 115 00:05:15,080 --> 00:05:16,919 Speaker 3: and we have a saw a good. 116 00:05:16,960 --> 00:05:18,520 Speaker 1: Sense guy at EBBS for every. 117 00:05:18,440 --> 00:05:23,040 Speaker 3: Less known than Trump from the public, but well known 118 00:05:23,080 --> 00:05:25,200 Speaker 3: in the industry. So we are trying to promote our 119 00:05:25,200 --> 00:05:26,560 Speaker 3: products on their own merits. 120 00:05:26,720 --> 00:05:28,599 Speaker 2: But do you need political backing? Is that what this 121 00:05:28,680 --> 00:05:29,880 Speaker 2: is going to come down? So it feels like an 122 00:05:29,920 --> 00:05:33,839 Speaker 2: increasingly political story, less about product, more about politics. 123 00:05:34,200 --> 00:05:36,320 Speaker 1: It plays a big role. Politics plays a big role. 124 00:05:36,839 --> 00:05:40,240 Speaker 3: But so we have to be even better and that's 125 00:05:40,240 --> 00:05:44,040 Speaker 3: what we're trying to achieve with our products again, making 126 00:05:44,240 --> 00:05:47,720 Speaker 3: sure that customers select airbus planes on the merits of 127 00:05:47,760 --> 00:05:48,240 Speaker 3: the planes. 128 00:05:49,400 --> 00:05:51,440 Speaker 2: As I say, you are the president of gifas as well. 129 00:05:51,960 --> 00:05:53,599 Speaker 2: Let's talk a little bit about kind of what is 130 00:05:53,600 --> 00:05:55,320 Speaker 2: happening here in Europe. I've talked to you in the 131 00:05:55,360 --> 00:05:56,800 Speaker 2: past about the idea that we need a kind of 132 00:05:56,839 --> 00:05:59,280 Speaker 2: airbus of defense. We need consolidation. We're going to see 133 00:05:59,279 --> 00:06:02,039 Speaker 2: some consolidation be in the space industry. Talk to me 134 00:06:02,720 --> 00:06:04,520 Speaker 2: when the Prime Minister comes, when the President comes, when 135 00:06:04,520 --> 00:06:07,159 Speaker 2: he comes back from the G seven Again, what is 136 00:06:07,200 --> 00:06:09,520 Speaker 2: the message here in terms of what needs to happen 137 00:06:09,560 --> 00:06:12,320 Speaker 2: in Europe on the defense side, and do you believe. 138 00:06:12,120 --> 00:06:13,560 Speaker 1: That the budgets are there. 139 00:06:13,880 --> 00:06:16,799 Speaker 2: The deficits in Europe apart from Germany are enormous right now. 140 00:06:16,960 --> 00:06:19,039 Speaker 2: Can Europe afford to rearm in the way that it 141 00:06:19,120 --> 00:06:22,799 Speaker 2: needs to to deliver the kind of defense industrial complex 142 00:06:22,839 --> 00:06:24,440 Speaker 2: that it needs to deliver if it wants to defend 143 00:06:24,440 --> 00:06:25,200 Speaker 2: itself right now? 144 00:06:25,560 --> 00:06:28,520 Speaker 3: I think Europe has understood and most of the large 145 00:06:28,520 --> 00:06:31,159 Speaker 3: countries of Europe that they need to step up in defense, 146 00:06:31,320 --> 00:06:33,800 Speaker 3: that Europe needs to take care of its own security, 147 00:06:34,480 --> 00:06:36,719 Speaker 3: and that they will be in the future. They will 148 00:06:36,720 --> 00:06:39,800 Speaker 3: get less support from the United States because the US 149 00:06:39,839 --> 00:06:43,200 Speaker 3: have made clear that Europe has to take care of 150 00:06:43,240 --> 00:06:46,400 Speaker 3: their own security and we have security issues at the 151 00:06:46,480 --> 00:06:47,800 Speaker 3: border of Europe. 152 00:06:47,760 --> 00:06:49,720 Speaker 1: With Ukrain and Russia. 153 00:06:50,400 --> 00:06:53,839 Speaker 3: So I am convinced that the countries of Europe know 154 00:06:54,120 --> 00:06:56,479 Speaker 3: that they have to step up. They will put more money, 155 00:06:56,960 --> 00:06:58,840 Speaker 3: they will spend more money in Europe. 156 00:06:58,880 --> 00:07:00,479 Speaker 2: You think the money is there conflict The. 157 00:07:00,480 --> 00:07:01,360 Speaker 1: Money will be coming. 158 00:07:01,440 --> 00:07:04,800 Speaker 3: We see, we see the early signs, but very strong 159 00:07:04,839 --> 00:07:07,719 Speaker 3: and clear signals that the money will be coming. That 160 00:07:07,760 --> 00:07:10,920 Speaker 3: the budgets are increasing, so probably not as fast as 161 00:07:11,480 --> 00:07:12,960 Speaker 3: what is publically said, but. 162 00:07:12,960 --> 00:07:13,640 Speaker 1: It's going to come. 163 00:07:14,040 --> 00:07:17,000 Speaker 3: Germany will be very committed, Other countries will be committed, 164 00:07:17,320 --> 00:07:20,280 Speaker 3: so money will come. There will be more money going 165 00:07:20,320 --> 00:07:24,160 Speaker 3: to security. The money will be spent in Europe more 166 00:07:24,200 --> 00:07:26,280 Speaker 3: than in the past. In the past, the majority of 167 00:07:26,320 --> 00:07:30,040 Speaker 3: the money spent for defense acquisition was spent to non 168 00:07:30,640 --> 00:07:36,920 Speaker 3: EU companies, mostly US companies. This will change progressively and 169 00:07:37,000 --> 00:07:40,040 Speaker 3: the money will be spent more wisely with more cooperations 170 00:07:40,360 --> 00:07:44,600 Speaker 3: creating scale. And as you know, we at Herbus are 171 00:07:44,640 --> 00:07:48,560 Speaker 3: experts in creating that scale. We digating commercial legation in 172 00:07:48,640 --> 00:07:52,040 Speaker 3: helicopters as well in missigns with our contribution to MBDA, 173 00:07:52,400 --> 00:07:55,400 Speaker 3: and we are currently working to create scale in satellite 174 00:07:55,400 --> 00:08:00,120 Speaker 3: manufacturing and services with our competitors, with our friends from talents. 175 00:08:00,120 --> 00:08:01,640 Speaker 2: Like when does that get Announcedhen, are we going to 176 00:08:01,640 --> 00:08:02,040 Speaker 2: see that deal? 177 00:08:02,080 --> 00:08:05,920 Speaker 3: But that's something we've already explained. We are moving forward 178 00:08:05,960 --> 00:08:09,320 Speaker 3: into the steps of discussing with authorities for the anti 179 00:08:09,360 --> 00:08:13,480 Speaker 3: trust and creating the case together, so it will come 180 00:08:13,600 --> 00:08:15,640 Speaker 3: later in the year, but that's something we are very 181 00:08:15,680 --> 00:08:18,120 Speaker 3: focused on creating scale in space. 182 00:08:18,320 --> 00:08:19,840 Speaker 2: Jol's great to see, thank you, how much different Sol. 183 00:08:19,840 --> 00:08:21,280 Speaker 2: I'm glad to see us now you've got a busy show. 184 00:08:21,440 --> 00:08:24,640 Speaker 2: Many hats are being worn given Fourie at this air show, 185 00:08:24,760 --> 00:08:28,080 Speaker 2: Yo for the CEO of Airbus and the president of 186 00:08:28,120 --> 00:08:30,920 Speaker 2: Givas joining us on day one here at the Paris 187 00:08:30,960 --> 00:08:31,320 Speaker 2: Air Show.