Airbus CEO on Cleaner Emissions, Tariffs, Space, Defense

Airbus Executive Interview Summary

Key Concepts:

• Sustainability in Aviation
• Sustainable Aviation Fuel (SAF)
• Net-Zero Carbon Emissions by 2050
• Fuel Efficiency
• Global Level Playing Field
• Decarbonization
• European Security and Defense
• Space Technology
• Scale in Manufacturing
• Tariffs

Sustainability in Aviation

The primary focus of the summit is sustainability, with a strong emphasis on technology. Sustainable Aviation Fuel (SAF) is considered a key technology for achieving significant progress, while hydrogen and other technologies are being explored for the future. The aviation industry's target is to achieve net-zero carbon emissions by 2050.

• Target: Net-zero carbon emissions by 2050.
• Key Technology: Sustainable Aviation Fuel (SAF).
• Future Technologies: Hydrogen and other alternative fuels.

Challenges and Progress Towards 2050 Goal

Achieving the 2050 target presents challenges, which are being discussed at the summit. Progress is being made, particularly in fuel efficiency, where economic and ecological objectives are aligned. Airlines are incentivized to purchase more fuel-efficient planes, regardless of the fuel type.

• Challenge: Scaling up SAF production and deployment.
• Alignment: Economy and ecology are aligned through fuel efficiency.
• Progress: Airlines are incentivized to buy fuel-efficient planes.

Global Cooperation and Divergent Approaches

A global level playing field is crucial for the development and adoption of SAF. Different regions are taking different approaches, with Europe implementing mandates (Fit for 55), the US providing subsidies (IRA), and China pursuing its own path. This lack of unity poses a challenge.

• Need: Global level playing field for SAF.
• Europe: Mandates for SAF use (Fit for 55).
• US: Subsidies for SAF (IRA).
• China: Independent approach to decarbonization.

China's Role in Decarbonization

China is serious about decarbonization, particularly in energy production, with significant investments in solar, wind, and nuclear power. There is a risk that China could outpace other regions in decarbonized technologies, potentially leading to a similar situation as seen in the electric car market.

• China's Focus: Decarbonized energy (solar, wind, nuclear).
• Risk: China outpacing other regions in decarbonized technologies.

Security vs. Sustainability in Europe

Security is considered a precondition for prosperity, which is necessary to fund climate transition and decarbonization. Investments in space and defense are increasing, but this is not seen as competing with sustainability efforts.

• Priority: Security as a precondition for prosperity and sustainability.
• Investment: Increased investment in space and defense.

European Space and Defense Capabilities

Europe needs to scale up its space and defense capabilities. Starlink is recognized as a breakthrough, and Europe is working to develop similar technologies. A joint venture between Airbus, Leonardo, and Thales is being created for satellite manufacturing, aiming to achieve scale and competitiveness.

• Goal: Scale up European space and defense capabilities.
• Initiative: Joint venture for satellite manufacturing (Airbus, Leonardo, Thales).
• Challenge: Fragmentation in European defense.

Airbus's Strategy for Growth

Airbus aims to expand its presence in the defense and space sectors, leveraging its experience in creating scale in the helicopter market. Collaboration and partnerships are key to achieving the right scale of investment and competitiveness.

• Strategy: Expand in defense and space sectors.
• Approach: Collaboration and partnerships to achieve scale.
• Example: Success in the helicopter market.

Impact of Geopolitical Factors

Geopolitical factors, such as the situation in Ukraine and the policies of Donald Trump, are pushing Europe to take its security and defense into its own hands.

• Drivers: Ukraine conflict and potential US policy changes.
• Response: Europe taking greater responsibility for security and defense.

Tariffs and Trade

Tariffs on aircraft between the US and Europe have historically been a "lose-lose" situation. A ceasefire was established in 2021. There are no current tariffs on aviation, and the hope is that this will continue. Airbus has significant infrastructure and manufacturing capabilities in the US, making tariffs detrimental to both sides.

• History: Tariffs on aircraft were a "lose-lose" situation.
• Current Status: No current tariffs on aviation.
• Impact: Tariffs would harm both US and European manufacturers.

Airbus's US Operations

Airbus has a significant presence in the US, including a final assembly line in Alabama. This facility assembles aircraft using components from around the world, creating US jobs and serving US airlines.

• Location: Final assembly line in Alabama.
• Impact: Creates US jobs and serves US airlines.

Concerns and Uncertainty in the US Business Community

There is uncertainty and questioning within the US business community regarding potential policy changes and their impact on various industries. Companies are in a "wait and see" mode, trying to understand the potential consequences and how to adapt.

• Sentiment: Uncertainty and questioning in the US business community.
• Approach: "Wait and see" mode to understand potential policy changes.

Conclusion

The aviation industry is committed to achieving net-zero carbon emissions by 2050, with SAF being a crucial technology. Global cooperation is essential, but divergent approaches and geopolitical factors pose challenges. Europe is increasing its focus on security and defense while continuing to pursue sustainability goals. Airbus is adapting to these changes by expanding its presence in the defense and space sectors and fostering collaboration to achieve scale and competitiveness. The potential for tariffs remains a concern, but the hope is that the lessons learned from past experiences will prevent their reintroduction.