Leeham News and Analysis
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Leeham News and Analysis
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“It’s not easy to compare:” Airbus’ CEO Faury
- Guillaume Faury has been the chief executive officer of Airbus Group since April 1. In this exclusive interview, he looks back on his first six months and ahead for the future of the company. Part 1 appeared Oct. 30. This is the second of two parts.
Guillaume Faury
Nov. 6, 2019, © Leeham News: “It’s not easy to compare the performance of the two companies,” says Guillaume Faury, the CEO of Airbus, when the inevitable comparisons between his company and Boeing are made.
The context was talking about advanced manufacturing, discussed in Part 1 of this interview.
“I don’t think we are behind on digital. I think they might have gained more preparation on the future of production systems. We are catching up big time if not ahead in some important places. I think we will know who’s first when the next generation of airplanes is launched. These will be the first ones with digital design and manufacturing. There’s not a single plane today which is full DDMS.”
The issue is key to the next new airplane produced by Airbus or Boeing.
NMA or, now, something else?
Is the Boeing New Midmarket Airplane a permanent casualty of the 737 MAX crisis? Source: Leeham Co. (c) 2019.
Boeing’s prospective New Midmarket Airplane (NMA) is already a casualty of the 737 MAX crisis. Boeing put off deciding whether to launch the airplane until after the MAX is back in the air and deliveries resumed.
The NMA may become a permanent casualty, LNA revealed Oct. 21.
Advanced manufacturing elements are being used on the 737, 767/KC-46A, 777 Classic and 777X and 787. The NMA would be the first Boeing Commercial Airplanes jet to converge all advanced manufacturing technologies. On the Defense side, the T-X trainer, now called the T-7 Red Hawk, and the MQ-25 drone are the first Boeing products to combine these elements into one platform.
But with doubts now hanging over the future of the NMA and the prospect a new Future Small Airplane (single-aisle) may be launched first, Faury and Airbus must sit back and wait.
“We have our views on product strategy,” he said. “We don’t like to strategize too much publicly.”
Once the MAX is back in service, Faury says Boeing “will have a choice to make.” With a backlog of nearly 5,000 737s, this is where Faury sees the demand.
“I don’t see the market as expecting a new plane,” Faury said. “They expect the right level of production, short term, of the right plane at the right time and with the right quality.
“What I am suggesting here is from my perspective, the 737 and the A320 families are in the market for quite a long time.”
Faury predicts the next generation of single aisle “will be a very different plane.”
“Are the technologies ready for this new wave, this new generation, of single-aisle planes?” Faury asks rhetorically. “I think they are not. It’s not just about digital and production systems. It’s about environment and de-carbonization.”
Faury said the competition will be “very interesting. It will be tough” preparing for the future of the next single aisle. “I would not be comfortable having to decide now to launch an FSA.”
Certification
Regardless of any new-design airplane, the certification process now is a question mark as a result of the MAX crisis.
Before the grounding, regulatory agencies largely reciprocated certification. There might have been differences here and there, but if the FAA certified the airplane, Europe’s EASA followed suit and vice versa. Other agencies generally followed the lead of these two.
But with the FAA’s reputation and processes in tatters, and EASA, Transport Canada, China’s CAAC and others saying they will do their own reviews before re-certifying the MAX, the question becomes obvious:
Will the certification process be upended for new airplanes?
Boeing has the 737-7, 737-10 and 777X certifications between now and 2021. Airbus has the certification of the A330-800 in 2020 and, in 2023, the A321XLR facing it.
Will reciprocity prevail or will something new be required?
“I think I was one of the first ones to be clear we need strong alignment and cooperation with agencies around the world, especially between the FAA and EASA,” Faury said.
“I believe one of the reasons why this industry is so safe is because there is an international standard and the authorities have been working together and recognizing each other. This is a very difficult situation to manage. I think they continue to cooperate, this is what I hear, even if there are differences on timing on how to bring the plane back to service,” he said.
“Once this is done, I want to believe they will be back together and the international cooperation that has prevailed so far will prevail again.”
Down cycle
With the MAX grounding about to enter its eighth month, orders were down year-to-date through the Oct. 18 interview with Faury. (Since then Spirit Airlines and Indigo Airlines announced agreements for 400 A320 family airplanes.)
Many believed the industry finally is in a down cycle. Some believed the MAX crisis caused a pause awaiting return to service before engaging in a competitive bakeoff.
Faury distinguished the single-aisle market from the twin-aisle sector.
He said there is still “very strong demand” for single-aisle airplanes.
“Yes, there is some wait-and-see attitude in the market, as well. But I don’t see reasons to believe we are in a down cycle.”
Widebodies are different, he said. “These are for international flight and there are a lot of international tensions. There is a bit of uncertainly on the speed of market growth for international flights. By the way, we see single-aisle growth to be very fast. The widebody is growing at a slower pace. There is a bit of oversupply compared to demand. Even if the demand is very strong, we are at the historical peak of supply.”
Tariffs
The Trump Administration imposed tariffs Oct. 21 on Airbus airplanes imported into the US at 10% of the purchase price.
American Airlines, Delta Air Lines, JetBlue, Frontier Airlines and Spirit Airlines are the biggest US operators and customers of Airbus. All except Delta have only A320neos coming; Delta also has A330neos and A350s.
Each opposed tariffs and each doesn’t want to be the one to pay them.
Faury, not surprisingly, declined to say who pays: the customer or Airbus.
“By definition, the tariffs are import duties, so they are legally to be paid by customers, by airlines,” he said. “But we are working very closely with our airline partners to see how we manage this situation. It’s working in progress.”
Lessors leasing to non-US airlines don’t pay tariffs.
Boeing wanted 100% tariffs, paid by Airbus.
“It is our perception Boeing is the only US company pushing for tariffs,” Faury said.
Faury is very careful. No need to discuss who on top, looks best. Everybody sees. Like many French CEO’s he’s as much a diplomat. Don’t cash in our abuse power gained. Boeing showed pride becomes before the fall.
Faury is too careful. He’s dropped the ball by concentrating on production. The experienced engineers who will design the future are being lost or retiring. This is the first time in 40 years Airbus does not have any plans for a new aircraft, time will come soon when the capability will be lost.
You are privy to in depth internal information?
@john smith
It’s true that Airbus is experiencing a lull in aircraft development following recent new product launches. While this cycle puts downward pressure on R&D overall, it is an ideal time to undertake ambitious technology research and develop future capabilities. The fruits of these investments will only be fully realised when major new programmes are launched. These programmes will be built on the back of new research and technology, underscoring the importance of technological leadership and competency.
What you seem to be advocating is for Airbus to start a new aircraft programme just for the sake of keeping experienced engineers busy, while seemingly ignoring the fact that this can be done by other means.
Mr Faury priorities seems to be to continuously improve Airbus’s environmental performance by cutting emissions throughout its commercial aircraft division, raising the fuel-efficiency of its aircraft and, over the longer-term, designing a new generation of cleaner passenger aircraft having a much lower carbon footprint.
It would appear that Mr. Faury’s also wants Airbus to be in a position where they will be able to preempt any industry disruptor, rather than wait for the company to be disrupted. Disruptors typically come from outside the industry they are disrupting.
Furthermore, as the industry is coming under sustained pressure to find clean low carbon solutions, the high barriers for any new players to enter the LCA market will very likely be reduced.
–
https://versatile-project.eu/partners/airbus-group
Apropos: what happened to that rather ambitious, but with a destructive streak Chief Technology Officer at Airbus?
Was that some kind of “enemy action”? Whiffs of Ignatio Lopez of VW famed optimizer.
https://en.wikipedia.org/wiki/Paul_Eremenko
“Best guy ever” 🙂
Doesn’t touch on him being a plant or not !?
Interesting, AB has entered a certain cycle int is life. Bought the CS100/300, developing production technology that they could bring to an C929 venture. Focus on evolution of the A350, and then bells-and-whistles for the FSA, where the money is.
“Rather do less well”?.
Why would Airbus get involved in a competing widebody plane with Russia/China like C929.
Doesnt make any sense on so many levels, have you even looked at the public information about the development process so far ?
I think Airbus aircraft engineers are busy working on A350-1000ULR “Qantas sunset”, A330neo weight reduction, A350-900/-1000 with the coming RR Ultrafan that also will allow an A350-1100, A322 with either 35k A321neo engines or a 37-40k RR Ultrafan and the new European fighter after Dassault has defined it, all the different Airbus factories (except the UK ones) will get their assignments with Dassault replacing everything UK.
One thing is letting engineers do their designs and test objects for performance and robotic build for a few €100 millions each until a full program go ahead costing €10 bn – 20bn is launched, that will only happen if Boeing moves or a new generation of engines becomes available.
@Dukeofurl.
Agree, just trying to think outside the box. China is the A330’s biggest market, the C929 could take a big chunk of that. In the other parts of the world the 787’s has taken a big slice of 330 replacements so far.
Only time will tell what AB will do (if any) in the 250-300 seat market. Think there are enough aircraft in the market for Trans-Atlantic and Trans-Pacific. The A321 of today will grow into a 250-275 seat TA requirement for routes of 1000-4000Nm?
Airport slots are filling up and the A321 is at the edge of SA size for effective/quick boarding and de-planing.
At the moment Europe, like the United States, is applying sanctions on the Commonwealth of Independent States. The last time I was there they were complaining about how boring the cheese had gotten since the CIS applied retaliatory sanctions on EU Cheese. Fundamentally the US is not much of a more reliable business partner and the EU is at the moment only slightly better so Airbus can’t get too involved with Russia. Gone are the days the Germans wanted to enthusiastically licence build the beautiful An 70 in lieu of the A400M. I really don’t understand it. There should never be any of this kind of nonsense and the EU and CIS should be growing closer. Meanwhile many Russians in leadership are quite happy for the sanctions to continue longer. Its strengthened their independence in technology and forced through agricultural reforms that would not have happened otherwise. Having said that Tianjin has a capacity of building 10 A320/month and will deliver its first A350 in 2021. Airbus has made lavish offers, including shifting A330 production to China so sanctions are directed primarily at Russia not China because powerful lobbies.
«I believe one of the reasons why this industry is so safe is because there is an international standard and the authorities have been working together and recognizing each other.»
Of course, that is pure nonsense. If we would have 3-4 authorities worldwide with completely independent assessments of a new aircraft, then there is a higher probability, that problems like MCAS would be discovered before 346 people are dead. That would mean more safety. The fact that there is basically only one assessment and all other authorities rely on the outcome of that one assessment is only good for profits. It saves a lot of money. 4 safety checks are safer than one. Period.
“Of course, that is pure nonsense.”
It is a strong hint. ( to the US, Boeing)
Don’t game the system for partisan purposes.
Afaics has the US side repeatedly strongarmed and frogmarched
the other certification authorities by way of showing the “retaliators toolbox” around.
Sounds very plausible.
On the Flip side we have the political aspects of EASA not grounding the Trent 1000.
Clearly its been major failures in assessment, fix and prediction and yet it was allowed to fly with two bad engine until the FAA stepped in.
As expected its now spread officially to the Ten as well as the 7000. Bad blades but they hope to eeek through until 2022 (?) when they have the latest final design.
All AHJ have issues, they all are strong armed by the country industry and separate review per Giudo serves safety ne3eds vastly better and not group nodding.
Brazil caught the MAX issue first (AHJ) – sadly it only was local. What we need is a major alert and mandate to re-consider if any recognized AHJ raises an issue (said country and its AHJ would have to be an aircraft mfg)
India was the one that called BS on even one bad engine (in this case P&W GTF on the A320NEO)
And that is right, if you have a suspect engine, it should come off and all twins should fly with two known good engines.
If you can’t find two good engine to put on your aircraft, then it should be grounded until that is provided.
If you are really talking about safety, that is it.
Flying aircraft with known issues that are potentially fatal is not safety.
As for product strategy in the mid- to long-term, the key word here from Mr. Faury is decarbonisation.
With Airbus sitting pretty on a complete portfolio of products, the company is in an excellent position to develop emerging technologies for big leaps in efficiency and environmental performance, working with engine OEMs to pioneer low-carbon propulsion technology (etc.).
https://www.arup.com/perspectives/future-proofing-aviation
Decarbonisation politics has a potential to severely damage and contract the industry if it gets out of hand (as it is showing signs of doing i.e. protests). I can see why the industry is playing along, to avoid wrath. There are many motivations driving ‘decarbonisation’ beyond environmental concerns. Political alignments and bases, emotions, globalisation and global governance, desire to increase the tax base, wealth redistribution including from first to third world, desire to create a cap and trade scheme for profit and of course ‘green subsidies’ for the now trillion dollar green industry which relies on subsidies and is now a lobby more powerful than Boeing. My own view is that the extremist climate alarmists need to countered with moderating facts to moderate anxiety. However the industry must make sure that should more severe taxes be implemented that the taxes be returned to the industry by R+D subsidies and investment in green aviation infrastructure. That is critical. R+D will help provide the new materials and technology. It may be that a system of airports be provided with cryogenic hydrogen fuel or synthetic hydrocarbons. The worst thing would be to allow all of the money be removed entirely from the industry and misused. Morally that’s not the point of a carbon tax I don’t believe in AGW as a problem.
An NMA at this stages makes sense to me as an intermediate step approach to an FSA which will be more radical in design that also might use hybrid power, etc. Think the time has come for an NMA using GTF/UF type engines, new materials and building techniques EIS around 2028 and a ramp-up to an FSA around 2035? So the Boeing philosophy in the right direction but timing out (even pre-Max) by several years.
Yes, I also think engines will grow in fan size for narrowbodies and they narrowbodies will be larger and more fuel efficient. If goverments push for taxes/landing fees per pax CO2 emissions it will be a huge pressure to increase pax load and lower fuel consumption with Ultra high bypass Engines initially until UDF’s will come as a cost reduction of not needing a 140″ diameter nacelle with intake, fan cowls, thrust reverser and exhaust.
More customers like Airbus for more choices of engines. instead of mostly only GE’s. BA will be far behind AB.
“Tariffs The Trump Administration imposed tariffs Oct. 21 on Airbus airplanes imported into the US at 10% of the purchase price.”
Are these being leveled at A320 aircraft produced at Mobil Alabama?
“I don’t see the market as expecting a new plane,” Faury said. “They expect the right level of production, short term, of the right plane at the right time and with the right quality.
“What I am suggesting here is from my perspective, the 737 and the A320 families are in the market for quite a long time.”
I bet he doesn’t, what a great answer, effectively he wants the status quo to play out for as long as possible when the neo/MAX is going to be at 60/40 and 40%+ of the production at very juicy A321 margins.
“” American Airlines, Delta Air Lines, JetBlue, Frontier Airlines and Spirit Airlines are the biggest US operators and customers of Airbus. All except Delta have only A320neos coming; Delta also has A330neos and A350s. “”
How can Faury forget the A220.
The A220-500 will come soon, I’m sure
and then only the A321 family will be important, 320 not so much and 319 useless.
I thought recently, AB pushed the A319Neo to a couple customer ahead of the A220-300? If the A320 and the B737Max hang around ten more years till an NSA is even started by both aerospace giants, then the A220-500 could be wanted by some airlines. Faury could be a little McNerney-ish: No moonshots! Just reiterations…
He is right to concentrate on production.The 220 and 320 ranges need production improvement -now.
As has been satiated above it is wrong to say there is no no work in progress.There is and it’s across the whole range of aircraft.
What he is correctly stating is that there is no need for any ‘clean sheet’ (€15 ban investment) required right now or in the near future.
Cranking more out more economically and tweaking/ expanding the existing range of products is the right way to go (imho).
I think the A322 will happen at some stage an be potentially a “major” development/upgrade. Maybe only stretched to ~48m (757-200 length) but; with Ultrafans, longer/taller under carriage to accommodate the larger fanned engines and also the downward folding wing-tips of the new 40-44m wing under development, also lower risk of tail strike, etc.
Two access doors in front of the wing will improve the on the ground turnaround times, Thus maybe only seating seating 15-20 more than the A321 it will basically be “a new aircraft” that should be good for many years and covers ground that an FSA/NSA wont. Cherry on top will be an A220/350 like nose section and intergrade components of their cockpits. Maybe call it the NM-SA-A, can recall Keesje once shown drawings of a “Greenliner” that could resemble this aircraft
Hopefully these are the type of things that keep AB Engineers busy at this stage.
Interesting that Air France penciled in a future A220-500 in their published plans.
Surely they would not do this unless they and Airbus discussed it? If it is forthcoming, would the development be done by Bombardier or Airbus or both?
Well its an amazingly self servicing statement.
Unsaid is we pulled the rug out from under Boeing and in fact with the A220 we do have a modern SA replacement up to the A320 level when we get the A220-500.
So, Boeing, just ignore that, focus on your 5000 aircraft and please don’t come out with a modern SA aircraft, we would have to do something and we don’t want to.
No, let us just keep taking your market share, its not dawn of Dec 7 and Pearl Harbor is not about to be attacked.
Airbus will only do the A220-500 when they have major cost reductions in place making it the 2+3 MD80 of the 2000’s. It will most likely have common systems with the A320neo replacement and be designed for manufacture by Kuka robots.
Regardless, its a generation better than the Ak320 let alone the 737 and its highly in Airbus interests Boeing does not mach it (or even exceed it)
Airbus have a big dependence on wings from the UK. Clarity on Brexit etc. could impact on pending decisions for future wings?
Dubai Airshow in 10 days, LH reviewing their 777-9 order. Could there be more rumbles in the desert jungle for the 777X?
http://c.newsnow.co.uk/A/1007773446?-2567:9097
Just a thought, could Lufthansa Group end up with a relatively simplistic fleet wide body of 787-8 (Eurowings)/-9/-10’s and 350-900/1000’s?
If a Frog had wings it would not bump along on its butt as my Wrestling Coach used to say
Lets see?