WEBVTT - Airbus CEO Guillaume Faury Talks Earnings

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. We do want to

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<v Speaker 1>stay in the transportation space and take a look at

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<v Speaker 1>the European planemaker air Bus, the world's largest plane maker,

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<v Speaker 1>the reported second quarter earning earlier today, and the big

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<v Speaker 1>concern was the big cash burn I had a chance

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<v Speaker 1>to catch up with the CEO of the air Bus

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<v Speaker 1>earlier today, Keonfoi. Here's what he had to say.

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<v Speaker 2>What we see in the first half of the euro

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<v Speaker 2>is a number of delivery that is at three hundred

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<v Speaker 2>and six. But we have also to have in mind

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<v Speaker 2>that we have sixty aircraft sitting on the ground fully

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<v Speaker 2>finished but with engines missing.

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<v Speaker 3>We call them gliders.

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<v Speaker 2>So if you look at what we've been able to produce,

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<v Speaker 2>including the gliders, actually we are mostly on track with.

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<v Speaker 3>What we expected to do in the first half.

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<v Speaker 2>So we count on engine makers mainly CFM and to

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<v Speaker 2>a smaller extent PRAT to recover on their engine deliveries

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<v Speaker 2>to Airbus, so we can be back on track with

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<v Speaker 2>a number of deliveries. So actually the negative free can

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<v Speaker 2>show that we have recorded for the first half reflects

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<v Speaker 2>mainly those missing deliveries and engine missing leading to aircraft

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<v Speaker 2>on the ground, although we have confirmed our guidance because

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<v Speaker 2>we believe we will get those engines and we'll be

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<v Speaker 2>back to where we need to be.

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<v Speaker 1>Are the delays in getting those engines? Is that related

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<v Speaker 1>to labor issues or is that more for parts and

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<v Speaker 1>just some hold ups in the supply chain.

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<v Speaker 3>Well, that's more the latter.

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<v Speaker 2>Actually, these are more short term issues that we are

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<v Speaker 2>generated in the first half of the year. When we

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<v Speaker 2>look at the CFM situation, ge faced industrial difficulties in

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<v Speaker 2>the beginning of the year. They delivered their course the

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<v Speaker 2>hot section of the engines late to the other partner,

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<v Speaker 2>which is and then Suffa faced a strike seven week

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<v Speaker 2>strike that impacted very significantly the ability to deliver home time.

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<v Speaker 2>They are recovering now, so it's really a timing issue

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<v Speaker 2>facing industrial challenges and we believe they are in the

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<v Speaker 2>situation now to deliver us back to normality till the

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<v Speaker 2>end of this year.

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<v Speaker 3>So that's the outproof for the next part of the year.

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<v Speaker 1>With regards to the backlog of orders, I am curious

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<v Speaker 1>as to what adjustments, if any, you have had to

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<v Speaker 1>make in light of some of the lord demand coming

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<v Speaker 1>out of the US, the restructuring of the order book

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<v Speaker 1>over with as well as a few other customers that

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<v Speaker 1>at least for right now, might be on the sidelines.

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<v Speaker 2>Actually, what we face at Albus is a very high

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<v Speaker 2>level of demand.

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<v Speaker 3>Overall.

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<v Speaker 2>We have by far more demand than the ability to supply.

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<v Speaker 2>We have a very strong backlock, the biggest backlog in

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<v Speaker 2>the industry, and this backlog keeps going up, keeps growing,

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<v Speaker 2>So we are not looking at it as a risk

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<v Speaker 2>for our business moving forward. The other global demand keeps

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<v Speaker 2>growing and we are doing our very best to ramp

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<v Speaker 2>up to serve that demand.

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<v Speaker 1>How manear is that? And more importantly, Gil, there's a

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<v Speaker 1>big question here about whether some of your customers are

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<v Speaker 1>actually asking for an acceleration and delivery of their order book.

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<v Speaker 2>Well, actually most of them, if not all of them,

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<v Speaker 2>are asking for an acceleration in the delivery. As I

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<v Speaker 2>said earlier, we are held back by the ability of engines.

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<v Speaker 2>We are ramping up on the eight three twenty family,

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<v Speaker 2>which is the bulk of what we do, up to

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<v Speaker 2>a production rate, a monthly production rate of seventy five

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<v Speaker 2>aircraft a month by twenty twenty seven, that will be

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<v Speaker 2>the highest ever achieved for a commercial aircraft. So that's

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<v Speaker 2>the challenge we have in front of us. It's a

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<v Speaker 2>good challenge because it reflects the strong demand we have

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<v Speaker 2>for our products.

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<v Speaker 1>You gave guidance and for investors here that explicitly did

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<v Speaker 1>not take into account the framework of a deal between

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<v Speaker 1>the United States and the European Union. When do you

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<v Speaker 1>think you'll have a little bit more confident of factoring

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<v Speaker 1>in that trade deal into your guidance.

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<v Speaker 3>Well, that's an important question to us.

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<v Speaker 2>We had the news over the weekend of the agreement

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<v Speaker 2>and the fact that civil aviation will be back to

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<v Speaker 2>the so called zero four zero meaning nor taris. That's

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<v Speaker 2>something we have enjoyed since nineteen seventy nine and drives

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<v Speaker 2>the success of this industry. We need something papered out

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<v Speaker 2>and implemented. We need an agreement in forced as soon

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<v Speaker 2>as possible to be able to be back to normal operations.

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<v Speaker 3>That's something important to us. But we welcome the agreement.

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<v Speaker 2>We hope it's going to be inforced as soon as possible,

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<v Speaker 2>and iddly more a matter of weeks than a matter

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<v Speaker 2>of months.

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<v Speaker 1>Kay on Bori, they're the CEO of the world's largest

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<v Speaker 1>plane maker, air Bus. They reported earning a little bit

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<v Speaker 1>earlier in the day. The shares over there in France

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<v Speaker 1>I fell slightly in the cash session, and their adr

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<v Speaker 1>here in the US a little bit more than that