Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Let's talk about Airbus shares just barely finishing the day
Speaker 2: in the green. That's after they reported third quarter adjusted
Speaker 2: EVA that beat estimates. But it's not all good news.
Speaker 2: The CEO also sounding the warning bell that Airbus deliveries
Speaker 2: remain very backloaded. I'm pleased to say that that CEO
Speaker 2: joins us now. His name is Gium Fory. He is
Speaker 2: the CEO of Airbus Gium. Great to have you with us.
Speaker 2: Let's talk about this target. You say that you're sticking
Speaker 2: to the target to deliver eight hundred and twenty aircraft
Speaker 2: to customers this year. You've only delivered about five hundred
Speaker 2: and seven through September.
Speaker 3: So what gives you the.
Speaker 2: Confidence that you'll be able to hit those numbers come
Speaker 2: the end of twenty twenty five?
Speaker 4: And the fact that we are fully prepared and that
Speaker 4: we're already close to end of October, and the fact
Speaker 4: that the one of the reasons for being backloaded is
Speaker 4: the likeability of engines for our single aisle. We were
Speaker 4: with sixty gliders media we closed the third quarter in
Speaker 4: down to thirty two gliders, and we think we're going
Speaker 4: to have the engines. We need to deliver those planes
Speaker 4: before the end of the year, so it's indeed a
Speaker 4: lot of work in the last quarter of the year.
Speaker 3: But we think we have the ingredients.
Speaker 4: We're prepared to come close to the eightal and twenty deliveries.
Speaker 3: We have guided form.
Speaker 2: And would you say that the engines are still your
Speaker 2: biggest bottleneck at this moment? You mentioned the gliders for example.
Speaker 2: I know you had to park some ready made planes
Speaker 2: because of that engine issue, So is that the biggest issue?
Speaker 2: Would you say when it comes to the state of
Speaker 2: your supply chain.
Speaker 4: The majority of what we're delivering are the A three
Speaker 4: twenty familiar aircraft, and indeed for those aircraft, the main
Speaker 4: bottleneck is the engine. Is the engine availability from both
Speaker 4: CFM and PRAT. We were with a very difficult situation
Speaker 4: at MEDIAIR. Things are improving. We think we're going to
Speaker 4: reach our numbers, as I said before for twenty twenty five,
Speaker 4: but we will have persisting tensions on availability of engine
Speaker 4: in twenty six and maybe in twenty seven as well.
Speaker 1: I am curious though, Gil. I mean, we've heard from
Speaker 1: a lot of the major airline executives that have raised
Speaker 1: some concerns here about the backlog, in addition to just
Speaker 1: the general problems in getting those engines onto those gliders.
Speaker 1: There's now, at least here in the United States, the
Speaker 1: issue of a government shutdown that of course effectively brings
Speaker 1: to a halt or at least a slowdown and any
Speaker 1: sort of certification. Here have you had to address that
Speaker 1: at all so far, not.
Speaker 4: To a major extent. We are not significantly exposed to
Speaker 4: this situation. Again, the main challenges we have are really
Speaker 4: on the delivery of aircraft, not on the certification of them.
Speaker 4: We have recently certified, I mean last year, the ecceler
Speaker 4: that's behind us, and the Acceller the eight three twenty
Speaker 4: one ECCELERA is a great airplane is now in service.
Speaker 4: That's behind us. And the next certification moving forward will
Speaker 4: be for the E three fifty fraighter. But that's not
Speaker 4: today a short term bottleneck. We have to start flying
Speaker 4: with the aircraft. That will be the case in twenty
Speaker 4: twenty six, so certification is for later. We planned into
Speaker 4: service in twenty twenty seven, so we hope that in
Speaker 4: the meantime we will be able to restart or to
Speaker 4: have appropriate and efficient certification. Work with the FAA the
Speaker 4: primary certification authority is YASA, and we're currently working with
Speaker 4: the YASA for preparing the certification file of the three
Speaker 4: fifty Fraser.
Speaker 1: With regards to your operations here in the United States,
Speaker 1: whether it has to do with the certification, whether it
Speaker 1: has to do with the shutdown or the broader issues,
Speaker 1: what are the deliveries. The timeline for delivery is coming
Speaker 1: out of the plant in Alabama.
Speaker 3: Well, Alabama is one of our production sites.
Speaker 4: You know that for the eight three twenty family, we
Speaker 4: are now relying on Mobile in the US in Alabama,
Speaker 4: in Toulouse and Hamburg in Europe, and on changing in
Speaker 4: China for a mobile. We have recently inaugurated the second
Speaker 4: final assembly line for the three twenty, so we are
Speaker 4: clearly ramping up proportionally more in the US than in
Speaker 4: the rest of the world, and we have an eight
Speaker 4: to twenty final assembly line, so Mobile Alabama will soon
Speaker 4: become the fourth largest production site of commercial aircraft in
Speaker 4: the world, and it's another site in the US.
Speaker 3: But basically we're jumping up eight three.
Speaker 4: Twenty globally towards the Red seventy five, and Mobile Alabama
Speaker 4: will take each.
Speaker 2: Air And you mentioned the A to twenty. When it
Speaker 2: comes to your production target, you actually lowered that as well,
Speaker 2: and I would love a little bit more detail on
Speaker 2: what led to that decision and when you know, we
Speaker 2: might see some of these supply chain challenges that you're
Speaker 2: do going with beyond snarled when it comes specifically to
Speaker 2: that body.
Speaker 4: Yeah, I like to highlight the fact that we are
Speaker 4: not reducing production. We are reducing the speed of ramp
Speaker 4: up on the eight to twenty. We are actually doubling
Speaker 4: production roughly within two years from twenty four to twenty six,
Speaker 4: and we have decided to go from what we were
Speaker 4: anticipating for next year that was rate fourteen to actually
Speaker 4: rate twelve, So moving up from rate six a few
Speaker 4: quarters ago, a few years ago to the rate twelve.
Speaker 4: We are on that trajectory. Things are moving forward quite
Speaker 4: well in twenty twenty five, but right twelve is a
Speaker 4: challenging target. We have to integrate as well the work
Speaker 4: packages from spirits on the AD to twenty, the wings
Speaker 4: and other smaller work packages, so we have a lot
Speaker 4: on our plate. We're also introducing progressively engine improvements to
Speaker 4: improve the durability of the engine for customers, so a
Speaker 4: lot of work on day to twenty very far and
Speaker 4: steep ramp up, and we think that's good enough in
Speaker 4: terms of quantity of work and challenges. Moving from twenty
Speaker 4: five to twenty six.
Speaker 1: I have to ask you about the defense business. Obviously
Speaker 1: that was a bit of a boost for you in
Speaker 1: the most recent period. Is this a long term story
Speaker 1: or one off.
Speaker 4: It's a mid term story for sure, maybe a long
Speaker 4: term one as well. You know that Europe has relied
Speaker 4: on the United States for a very long time when
Speaker 4: it comes to security of Europe, and we are now
Speaker 4: in different times. Europe is really ramping up in its
Speaker 4: ability to secure itself, to defend itself, which means significant
Speaker 4: increase in defense budgets for the main countries of Europe
Speaker 4: and the Natal members in Europe. So from that perspective,
Speaker 4: it's a midterm or even long term perspective. And on
Speaker 4: the short term it comes with orders for more equipment
Speaker 4: for development of new ones. And indeed we have a
Speaker 4: tailwind when it comes to our numbers and our growth
Speaker 4: coming from defense against that backdrop.
Speaker 2: And we shall also talk about your ambitions when it
Speaker 2: comes to space as well, and to compete against elon
Speaker 2: musk SpaceX I know that you're merging some of your
Speaker 2: operation with regional peers trying to create a regional venture.
Speaker 2: That project expected to be running in twenty twenty seven GM.
Speaker 2: Would you anticipate though you might run into any sort
Speaker 2: of regulatory challenges? Here is twenty twenty seven looking like
Speaker 2: a firm date.
Speaker 4: Well, we just signed the memo honub of understanding with
Speaker 4: Talis and Leonardo to create that European player and that
Speaker 4: is able to or will be able to compete at
Speaker 4: scale on the global.
Speaker 3: Competitive landscape. So that's really good. We are not.
Speaker 4: Only willing to compete with SpaceX and starting obviously that's
Speaker 4: a big player and a fast moving player, but we
Speaker 4: are serving many other needs, including defense in.
Speaker 3: Europe and across the world. That creates a.
Speaker 4: Company that has the put on sun to be very
Speaker 4: competitive to serve the interest and the needs of the
Speaker 4: European players and more global players. As I said, we
Speaker 4: have to go through the regulatory process to the anti trust.
Speaker 3: That's something that is now ahead of us.
Speaker 4: Well, I think Europe has moved forward as well, understanding
Speaker 4: that it needs to be able to compete globally, and
Speaker 4: we hope that we will be supported for what we're doing.
Speaker 4: We have to demonstrat compliance with the European regulations and
Speaker 4: other regulations.
Speaker 3: We're starting at work now, all right.
Speaker 1: Really appreciate you taking time for us and CEO of
Speaker 1: the air Bus theregy for on the heels of the
Speaker 1: earnings just alt most recently, but a big focus right
Speaker 1: now on potential delivery delays.