After a life at Airbus, Christian Scherer (Duisburg, Germany, 61 years old) has been CEO of the commercial division of the world's largest aviation manufacturer for a few weeks now. He takes office at a particularly good time: 2023 was a record year for orders and deliveries, and the flagship model of his main competitor on short and medium-haul routes – Boeing's 737 MAX – is going through the umpteenth crisis. During a visit to the Airbus factory in Getafe (Madrid), he denies the biggest problem: “I forbid myself to talk about the benefits that arise from what is happening.”
Questions. The aviation sector has recovered from the pandemic much faster than expected.
Answer. Yes, the recovery was faster than we even expected. There is a human desire to travel: as soon as restrictions were lifted, international travel resumed.
Q Something similar happened after the Russian invasion of Ukraine: the markets punished the sector harshly, but the recovery was just as quick…
R. The conflict in Ukraine has had an impact, but the world has adapted and air travel has recovered.
Q You receive an avalanche of orders.
R. We are satisfied because it speaks for the relevance of our products. It is a phenomenon linked to two factors: the accelerated recovery after two years of the pandemic and the replacement of older aircraft with more efficient ones that consume and emit less.
Q What weighs more?
R. Recreation [pospandemia], but airlines' awareness of decarbonization is growing and that means they are accelerating the renewal of their fleets. Only 30% of commercial aircraft flying today are of the latest generation; the rest use between 25% and 30% more. One of our recent successes compared to Boeing is that our aircraft are more efficient and therefore more environmentally friendly.
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Q The problem is that, as you yourself recognize, Airbus is unable to produce and deliver as many aircraft as there is demand for.
R. It's more than a problem, it's a frustration. In March 2020 we had to reduce production practically by half. It was traumatic: the investment cycle was interrupted and it's not easy to turn everything off and on again. There is a lot of inertia and some capabilities of our industrial ecosystem have been lost.
Q Do you think they overreacted and reduced their production capacity so much?
R. No. We had an intense internal debate and some felt that the amount needed to be reduced further because of the disruption [de demanda] It was big. If we had produced more, we would have run the risk of only having aircraft on our balance sheet.
Q Back to today: The opportunities ahead of us are enormous: the market is in a phase of clear prosperity.
R. Our main task now is to manage this upward curve [de demanda] up to the capacity limit of the supply chain. We are not the weak part of the production chain: the hotspots are in engine construction and cabin equipment, because many airlines not only buy new aircraft, but also improve their existing fleet.
Q Can they increase the production rate even further?
R. Today I no longer believe it: If a single supplier fails, the entire system collapses. And our chain is very long and complex.
Scherer, at the Airbus factory in Getafe.Samuel Sánchez
Q Its main competitor, Boeing, is weak.
R. Many observers say: “Christian, you are selling like crazy and taking advantage of the situation to invade the sky and throw Boeing aside.” That is not the case: we run the business much more seriously. The risk of making decisions with these parameters would be too high.
Q The year 2024 has started very badly for them, with a new serious problem on the 737 MAX. Can Airbus use this situation to its advantage?
R. Not in the traditional sense. What is happening to Boeing is a Boeing problem, but also a reminder that safety is our most important pillar. It's something non-negotiable. I don't think we'll get any benefit from selling more aircraft because we've sold everything. Not only must we capitalize on this incident, we must also learn lessons from it.
Q One thing is clear, however: for an airline considering purchasing a B737 MAX, the A320 is the cheapest alternative. And that's good for you.
R. Not necessarily. Any doubt about the integrity or safety of the aircraft is not positive. I forbid myself to talk about the benefits that arise from what happened.
Q Are you seeing more interest from airlines that have chosen Boeing so far?
R. They know that we cannot meet demand in the short term. Even if a Boeing customer wanted to switch to Airbus, they would not be able to do so until 2030. So we are not substitutes. In this segment [corto y medio radio] we have a two-thirds market share; It's a very, very strong position. Nobody doubts that the A320 is a very good product.
Q Not long ago, American airlines pretty much only bought Boeing.
R. It is true that in recent years both our presence and our quota [de mercado] It has grown in the US. This business is guided by commercial and financial decisions: each company chooses the most efficient and effective alternative. Of course, Airbus' global strength also extends to what is probably the most competitive market in the world.
Q However, much of the future of the aviation sector lies in China and India.
R. We have made great efforts to position ourselves in the largest growth market, India. We are well positioned there and also in China, where we had a relatively modest position 20 years ago and now have quite a presence, including an assembly line in Tianjin.
Q They are also a source of competition: China has been trying for years to have a major domestic aircraft manufacturer. And it appears to have been found in Comac.
R. In fact, we have a new competitor. It is legitimate for a country like China to want to increase its sovereignty in a strategic sector such as the air sector: the pie is growing and it is logical that there are more players seeking their share. However, the ecosystem around Airbus or Boeing is so large that many countries or companies prefer a small part of this success to a large part of a smaller success. This is the case in India, where some want to enjoy the political glamor of an assembly line. But there is a smarter option than risking becoming a direct competitor to Airbus or Boeing.
Q So he is not afraid of new competition.
R. No. This is positive because it forces us to maintain a high level of excellence and technological advancement. Comac, for example, didn't bring anything new to the table: same engines, same avionics, same basic architecture…
Q But at a cheaper price.
R. The question is whether the world wants to buy a cheaper aircraft from yesterday when an Airbus is equipped with new technology and allows a reduction in consumption of almost 25%.
Q The aviation sector is one of the most difficult sectors to decarbonize. How it goes?
R. As I said, 70% of the world fleet comes from previous generations. The airlines are equipping themselves with the best there is.
Q But that won't be enough.
R. No, it won't be that. Today, unlike three years ago, I believe that this is an important part [de la descarbonización] is made with sustainable aviation fuels [los llamados SAF, por sus siglas en inglés].
Q Do you think of this as a bridge to hydrogen?
R. Yes, like a big bridge. It will be more than half of the medium-term solution, because an aircraft is an investment of 25 years and it will take more than two decades to replace the aircraft flying today that can already operate with SAF. And there is something else we can improve: We live in a digital world, but air traffic management still suffers from many inefficiencies: We still fly in zigzags, constantly up and down… Just like 70 years ago. An improvement would reduce fuel consumption by 10%.
Q Three years ago, Airbus announced that the first hydrogen-powered airliner would fly in 2035. Are you holding on to it?
R. Yes absolutely.
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