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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: The CEO of URBUS Game Folly, joins US now Game,

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Speaker 2: thank you so much for being with this. You've told

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Speaker 2: the market you'll deliver eight hundred planes this year. The

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Speaker 2: market had coalesced around eight hundred and twenty six. The

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Speaker 2: natural question is are you being overly conservative with your

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Speaker 2: guidance or pragmatically conservative?

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Speaker 1: Hello?

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Speaker 2: Hi.

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Speaker 3: Indeed, we've guided for twenty twenty four for around eight

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Speaker 3: hundred deliveries, coming from a guidance last year that was

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Speaker 3: seven hundred and twenty for twenty twenty three, and we

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Speaker 3: ended up slightly higher with seven hundred and thirty five.

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Speaker 3: But what is important for ABBUS is to be on

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Speaker 3: track with the romp up trajectories that we have for

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Speaker 3: our different planes, our different products, and in particular when

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Speaker 3: it comes to the eight three twenty family, and with

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Speaker 3: what we have indicated for twenty twenty four, that's what

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Speaker 3: we do. We're on track with the ramp up to

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Speaker 3: reach the rate seventy five planes per month in twenty

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Speaker 3: twenty six. So that's basically what matters for us, and

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Speaker 3: I consider we are roughly in the ballpark of what

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Speaker 3: was expected or what was to be expected in terms

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Speaker 3: of ramp up, so I consider we aren't track with

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Speaker 3: our pup plants.

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Speaker 1: There still are these supply chain snorrels that the entire

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Speaker 1: world is considering right now. Given that, given you are

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Speaker 1: more conservative than what estimates had said, have you started

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Speaker 1: to warn airlines that deliveries will be delayed for late

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Speaker 1: this year and next.

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Speaker 3: Well, we're working with our airline customers based on what

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Speaker 3: we tell them and not what the expectations of the

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Speaker 3: markets will be on the number of planes we would

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Speaker 3: be delivering, So we keep working and discussing with our customers.

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Speaker 3: There's no surprise today that is linked to the fact

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Speaker 3: that we're guiding at around eight hundred planes, because again

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Speaker 3: that's consistent with what we had in mind and what

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Speaker 3: was the basis of our discussion and contract with our customers. However,

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Speaker 3: one point is important, indeed, is the supply chain, and

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Speaker 3: what we are trying to achieve in this very complex

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Speaker 3: environment when it comes to suppliers is the right balance

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Speaker 3: between what we see coming from the demand that is

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Speaker 3: very strong and the ability of the supply chain to

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Speaker 3: serve our plans. So we want to be reasonably cautious

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Speaker 3: in the sense of looking at those difficulties in the

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Speaker 3: supply chain, understanding the bottlenecks, and making sure we find

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Speaker 3: what I call the sweet spot, which is the right

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Speaker 3: balance between that strong demand and the supplier's capabilities. So

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Speaker 3: that's where we are, and I hope in twenty twenty

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Speaker 3: four we'll be able to serve like what we did

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Speaker 3: last year, meaning proving that that was the right balance

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Speaker 3: between the two forces.

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Speaker 2: The supply chain very contentious issue. It's been brought into

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Speaker 2: light by the recent disasters. Obviously, Spirit Arrow is one

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Speaker 2: of your suppliers. Now, whatever deals they do or whatever

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Speaker 2: deals they construct, that is their responsibility if they lose money.

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Speaker 2: But you, as a CEO, will you not reflect perhaps

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Speaker 2: on being less aggressive, less pressured in negotiating with your

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Speaker 2: supply chain. Do you hold some responsibility as the CEO

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Speaker 2: for the style of negotiation that you do with the

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Speaker 2: supply chain.

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Speaker 3: We're in charge at the end. We are delivering planes

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Speaker 3: in that case to our airline and lesser customers, and

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Speaker 3: we take full responsibility for what we do, what we deliver,

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Speaker 3: and that comes with the management of the supply chain. Indeed,

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Speaker 3: the way you manage your own supply chain is your

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Speaker 3: own responsibility, but it's a rather complex thing to do

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Speaker 3: in the environment we're in, especially with what happened with

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Speaker 3: the COVID shock that was really your shock for the industry,

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Speaker 3: and there's a lot that is linked to a case

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Speaker 3: by case, one to one discussion. There's also a question

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Speaker 3: of culture at the suppliers or you need to manage

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Speaker 3: to combine those cultures, and we try to make sure

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Speaker 3: that we can ramp up that we do it focusing

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Speaker 3: on the right priorities. You know that quality and safe

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Speaker 3: he is the top priority for this industry and for

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Speaker 3: the CEO that I am and I will keep working in.

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Speaker 1: Detrigreer Monday, you called on the Boeing mishap. You said

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Speaker 1: it this incident, this incident makes us very humble in

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Speaker 1: this circumstance. What does it mean to be humble? Are

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Speaker 1: you changing some of your procedures in light of what

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Speaker 1: happened with Alaska Air and air end Boeing.

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Speaker 3: We're constantly challenging ourselves, reviewing what we do, monitoring the

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Speaker 3: results of our action plans, and that's a constant evolution.

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Speaker 3: So please don't believe that there is suddainly one thing

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Speaker 3: happening and we have to completely change what we do.

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Speaker 3: It's on the con quarry one more ingredient, one more

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Speaker 3: data point that we are looking at that we're trying

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Speaker 3: to understand what it says about that supplier or that

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Speaker 3: way of doing business, and there will be a lot

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Speaker 3: of learnings when more information will be made available on

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Speaker 3: what has happened so quality and safety. It's a permanent challenge.

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Speaker 3: It's something that I said makes us humble because we

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Speaker 3: know we're exposed to mishaps and it's on us to

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Speaker 3: find the ways to have a system that works, to

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Speaker 3: have people that are on top of the issues and

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Speaker 3: constantly changing, challenging and changing what we do to move

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Speaker 3: forward efficiently. That's the nature of what we do.

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Speaker 2: Let's talk about taking opportunity. United are reportedly exploring ways

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Speaker 2: to get out of their agreement with Boeing on some

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Speaker 2: of the seven three seven max hands. Are you in

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Speaker 2: active negotiation with them? What would it take to win

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Speaker 2: United over to you? Is that a real new order

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Speaker 2: possibility from them on this.

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Speaker 3: I don't come in on single negotiation with one or

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Speaker 3: the other of our customers. We have a very strong

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Speaker 3: product line with the.

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Speaker 2: Have you seen more active engagement from act with their

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Speaker 2: engagement from other customers. Have you seen more active engagement,

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Speaker 2: real engagement and real marketing the customers post this incident.

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Speaker 3: There are two main products in these segment. That is

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Speaker 3: a very important segment for Radiation and obviously when there

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Speaker 3: are things happening and when there is an indication of

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Speaker 3: more challenges coming on the one side, they are discussions

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Speaker 3: with the other side.

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Speaker 1: Are you then seeing more demand from those customers? Again,

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Speaker 1: I know you don't want to talk about individual names,

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Speaker 1: but is it a material shift.

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Speaker 3: There is a very strong demand for the three twenty family.

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Speaker 3: That's not new. You've seen the level of orders we

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Speaker 3: had last year. It was the recorder the record for

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Speaker 3: Urbus in terms of bookings. So the very strong demand

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Speaker 3: for the eight three twenty family, and in particular the

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Speaker 3: three twenty one was existing before this event and we'll

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Speaker 3: continue to exist after this event. We are very happy

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Speaker 3: of the strength of that product and we keep investing

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Speaker 3: in that product. We will have the entry into service

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Speaker 3: of the exceler the high end version of this product

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Speaker 3: later this year, and that's what we're doing. We're focusing

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Speaker 3: on what we can do to best serve our customers.

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Speaker 2: Where's the hardest demand g You know, we have the

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Speaker 2: West fully evolved and post COVID travel levels are high.

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Speaker 2: But if I say where's the hardest order book to

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Speaker 2: come from, where would you put the pen on the map?

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Speaker 3: Obviously in twenty twenty three, I would mention India. We

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Speaker 3: had the biggest order ever coming from Indigo with five

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Speaker 3: hundred planes for one contract. And Indigo is a very

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Speaker 3: very important customer of Airbus. We are very close relationship

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Speaker 3: with them. We help each other during the COVID crisis

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Speaker 3: and we want to keep moving forward with them. And

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Speaker 3: on top of the Indigo order was the big order

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Speaker 3: for Air India with single aid and white body planes

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Speaker 3: with a total of seven hundred and fifty planes in

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Speaker 3: twenty twenty three. For India, I think that's the place

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Speaker 3: where the growth is the fastest and that's really significant

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Speaker 3: for the industry. But we had demand a bit from everywhere,

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Speaker 3: including from mature markets for replacement of planes, driven mainly

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Speaker 3: by the need to reduce shul burn and to reduce

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Speaker 3: carbon emissions.

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Speaker 1: Right yes, certainly, global conversation having so, demand is still

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Speaker 1: strong there and this goes back to some of the

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Speaker 1: contracts that you have with Spirit Era making sure that

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Speaker 1: you get those things again, as you say, in a

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Speaker 1: quality manner. Of course, you're in the middle of renegotiating

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Speaker 1: some of the loss making contracts. How close are you

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Speaker 1: to reaching a deal and doesn't mean higher prices and

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Speaker 1: therefore crypt margins.

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Speaker 3: You know, no deal is closed till it is closed,

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Speaker 3: and therefore it's always difficult to say when it's finished.

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Speaker 3: What is important for us is to have this close

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Speaker 3: conversation and discussion with Spirit. They are an important supplier

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Speaker 3: of their bus. Even if they serve mainly Boeing, there

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Speaker 3: will be a big supplier of Boeing, but they contribute

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Speaker 3: to our eight to twenty and the eight three fifty

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Speaker 3: ramp up. And that's what we are focusing on. And

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Speaker 3: when we will have a set of conditions that will

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Speaker 3: serve both parties in the best possible way, will come

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Speaker 3: to contract or. I will not comment on by when

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Speaker 3: we think we're going to find a different contractual set

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Speaker 3: of conditions. We have a contract or, we have contacts

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Speaker 3: in place, and our friends that Spirit have to comply

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Speaker 3: with the contactual obligations they have agreed to sign in

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Speaker 3: the past till we find new con hoctorical conditions.

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Speaker 1: All right, Gilm, I hope we're the first you tell

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Speaker 1: when you do reach an agreement there, Gim, thank you

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Speaker 1: so much for joining us this morning. We appreciate your time.

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Speaker 1: Airbust CEO Gillum Foy