Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Good morning, Lizzie.
Speaker 1: Yeah, let's just set the scene.
Speaker 2: As we start the Paris Show this year. As you say,
Speaker 2: it is likely to be affected by a number of
Speaker 2: external factors. The most obvious one, of course, is what
Speaker 2: has just happened in India. That means that the CEO
Speaker 2: Boeing is not going to be here. It obviously casts
Speaker 2: a very long shadow over events at the show. You've
Speaker 2: also got the conflict in the Middle East as well,
Speaker 2: and that's going to cast a long shadow as well.
Speaker 2: Maybe some of the news, some of the some of
Speaker 2: the news, some of the announcements that we were expecting
Speaker 2: coming from the show may not appear, may get pushed
Speaker 2: a little bit to the right, maybe coming a little
Speaker 2: bit later. So there's a number of factors that are
Speaker 2: impacting the show that are obvious, but there's a number
Speaker 2: of factors that are still impacting. What is happening within
Speaker 2: airspace more broadly that has maybe slightly longer in duration.
Speaker 2: There's still a supply chain problem. We're still worrying about
Speaker 2: what is happening with the Tarist store. We don't understand
Speaker 2: yet what the visibility around that all looks like. And
Speaker 2: there's also the factor of the dollar as well. The
Speaker 2: depreciating dollar is something you need to bear in mind.
Speaker 2: When an industry prices most of its products in dollars
Speaker 2: and you see a significant change, that is a factor.
Speaker 2: So there's a lot to talk to Gillon Fouri about.
Speaker 2: He is, of course the president of GIFAS these French
Speaker 2: Aerospace Association. He's hosting this event. He is, of course
Speaker 2: as well the CEO of air Bus.
Speaker 1: Good morning, Good morning.
Speaker 2: Is it going to be a quiet show that there's
Speaker 2: so many things going on at the moment? Does that
Speaker 2: put a little bit of a cloud over what's going
Speaker 2: to happen here?
Speaker 3: I think the accident last week obviously was a very
Speaker 3: targic event. We're all working hard in this industry for
Speaker 3: these not to happen, or when it happens, it's a
Speaker 3: big setback. But yes, we have a slow start indus show,
Speaker 3: but I think it will be a good show, as
Speaker 3: you rightly say that, plenty of uncertainties and difficulties, but
Speaker 3: alsow some mega trends, more and more people traveling, very
Speaker 3: strong demon for air travel and the lot of activity
Speaker 3: for our industry.
Speaker 1: You talk about the uncertainty.
Speaker 2: Thomas, your CFO, was saying the other day, I think
Speaker 2: it was on Friday, talking about the idea that maybe
Speaker 2: there isn't the visibility on buybacks right now because of
Speaker 2: the uncertainty that exists right now within the industry. How
Speaker 2: much uncertainty is that? How much visibility do you have?
Speaker 2: How confidence are you in the targets you're setting yourself
Speaker 2: right now?
Speaker 3: Well, we have plenty of contradictions to manage. We have
Speaker 3: a very strong backlog of sign contracts, customers expecting those
Speaker 3: aircraft to be delivered, so we have pressure on deliveries.
Speaker 3: We have a challenging situation for supply chain coming out
Speaker 3: of COVID now with the uncertainties on trade and also
Speaker 3: on conflicts around the world.
Speaker 1: So we're pushing hard to.
Speaker 3: Be able to fulfill our obligations to our customers.
Speaker 1: They count on us. But it's a certain world, so
Speaker 1: we have also to getting more and certain less.
Speaker 3: I think it's a contradiction. It's full of contradictions. Mega
Speaker 3: trends are there. Demand for air travel is there. That's
Speaker 3: the fact it's growing, so we have to serve that demand.
Speaker 3: But on the other hand, is on the short term
Speaker 3: on the supply chain management on the way conflicts are
Speaker 3: in impacting the supply chain and our ability to do business.
Speaker 3: It's becoming more challenging. So there's probably more difficulties to
Speaker 3: do business, but the reasons, the fundamentals of business are
Speaker 3: very strong.
Speaker 1: What are the challenges right now? What do you not
Speaker 1: have enough of?
Speaker 2: I will talked to the past, like engines, you don't
Speaker 2: have enough about seats toilets. Where is it right now
Speaker 2: that you're facing the challenges right?
Speaker 3: I mean the uncertainties that are weighing on us are trade.
Speaker 3: Obviously tariffs.
Speaker 1: What is the next steps?
Speaker 3: What is going to happen with tariffs going down, escalating, escalating?
Speaker 2: We don't know.
Speaker 1: So we have to make different scenarios. What do you
Speaker 1: think is going to happen?
Speaker 3: We have to make different scenarios and be resilient to
Speaker 3: different scenarios. It's not about thinking, it's about preparing, It's
Speaker 3: about being resilient. That's the world we're living in. Then
Speaker 3: you have the security conflicts around the world which are
Speaker 3: impacting ability to fly over certain zones.
Speaker 1: That's difficult for airlines.
Speaker 3: That is impacting the willingness of some areas of the
Speaker 3: world to travel to other areas of the world. Then
Speaker 3: you have the US China tensions which are not helping.
Speaker 3: So when it comes to our supply chain, a lot
Speaker 3: of things have improved, especially compared to last year. We
Speaker 3: have by far less critical issues, but the remaining ones
Speaker 3: are big ones. As you know, on the single line,
Speaker 3: we have gliders so wening, we have airplanes fully ready
Speaker 3: to be delivered without engines. We have an engine crisis
Speaker 3: on our single aircraft and that's really what we're trying
Speaker 3: to solve with our friends from CFM.
Speaker 2: Boeing has a new head of sales. Okay, his name
Speaker 2: is Donald Trump. He's the President of the United States,
Speaker 2: and it seems as if the message coming at the
Speaker 2: moment is you order a bunch of Boeing airplanes, you
Speaker 2: are going to get a better trade deal. Where's the
Speaker 2: muscle in Europe? Where's the political backing? The Prime Minister
Speaker 2: is going to be here a little bit later on
Speaker 2: today you're going to be greeting. Where's the political muscle
Speaker 2: that you need to be able to do to compete
Speaker 2: with what is happening with buying and the President of
Speaker 2: the United States.
Speaker 3: Right, we like the power of our products at ebers.
Speaker 3: We are passionate about techniques about supporting what our customers
Speaker 3: need with the product, the right customer support as well,
Speaker 3: and we have a saw a good.
Speaker 1: Sense guy at EBBS for every.
Speaker 3: Less known than Trump from the public, but well known
Speaker 3: in the industry. So we are trying to promote our
Speaker 3: products on their own merits.
Speaker 2: But do you need political backing? Is that what this
Speaker 2: is going to come down? So it feels like an
Speaker 2: increasingly political story, less about product, more about politics.
Speaker 1: It plays a big role. Politics plays a big role.
Speaker 3: But so we have to be even better and that's
Speaker 3: what we're trying to achieve with our products again, making
Speaker 3: sure that customers select airbus planes on the merits of
Speaker 3: the planes.
Speaker 2: As I say, you are the president of gifas as well.
Speaker 2: Let's talk a little bit about kind of what is
Speaker 2: happening here in Europe. I've talked to you in the
Speaker 2: past about the idea that we need a kind of
Speaker 2: airbus of defense. We need consolidation. We're going to see
Speaker 2: some consolidation be in the space industry. Talk to me
Speaker 2: when the Prime Minister comes, when the President comes, when
Speaker 2: he comes back from the G seven Again, what is
Speaker 2: the message here in terms of what needs to happen
Speaker 2: in Europe on the defense side, and do you believe.
Speaker 1: That the budgets are there.
Speaker 2: The deficits in Europe apart from Germany are enormous right now.
Speaker 2: Can Europe afford to rearm in the way that it
Speaker 2: needs to to deliver the kind of defense industrial complex
Speaker 2: that it needs to deliver if it wants to defend
Speaker 2: itself right now?
Speaker 3: I think Europe has understood and most of the large
Speaker 3: countries of Europe that they need to step up in defense,
Speaker 3: that Europe needs to take care of its own security,
Speaker 3: and that they will be in the future. They will
Speaker 3: get less support from the United States because the US
Speaker 3: have made clear that Europe has to take care of
Speaker 3: their own security and we have security issues at the
Speaker 3: border of Europe.
Speaker 1: With Ukrain and Russia.
Speaker 3: So I am convinced that the countries of Europe know
Speaker 3: that they have to step up. They will put more money,
Speaker 3: they will spend more money in Europe.
Speaker 2: You think the money is there conflict The.
Speaker 1: Money will be coming.
Speaker 3: We see, we see the early signs, but very strong
Speaker 3: and clear signals that the money will be coming. That
Speaker 3: the budgets are increasing, so probably not as fast as
Speaker 3: what is publically said, but.
Speaker 1: It's going to come.
Speaker 3: Germany will be very committed, Other countries will be committed,
Speaker 3: so money will come. There will be more money going
Speaker 3: to security. The money will be spent in Europe more
Speaker 3: than in the past. In the past, the majority of
Speaker 3: the money spent for defense acquisition was spent to non
Speaker 3: EU companies, mostly US companies. This will change progressively and
Speaker 3: the money will be spent more wisely with more cooperations
Speaker 3: creating scale. And as you know, we at Herbus are
Speaker 3: experts in creating that scale. We digating commercial legation in
Speaker 3: helicopters as well in missigns with our contribution to MBDA,
Speaker 3: and we are currently working to create scale in satellite
Speaker 3: manufacturing and services with our competitors, with our friends from talents.
Speaker 2: Like when does that get Announcedhen, are we going to
Speaker 2: see that deal?
Speaker 3: But that's something we've already explained. We are moving forward
Speaker 3: into the steps of discussing with authorities for the anti
Speaker 3: trust and creating the case together, so it will come
Speaker 3: later in the year, but that's something we are very
Speaker 3: focused on creating scale in space.
Speaker 2: Jol's great to see, thank you, how much different Sol.
Speaker 2: I'm glad to see us now you've got a busy show.
Speaker 2: Many hats are being worn given Fourie at this air show,
Speaker 2: Yo for the CEO of Airbus and the president of
Speaker 2: Givas joining us on day one here at the Paris
Speaker 2: Air Show.