Airbus chief: A China-West economic divorce remains unlikely
The economic relationship between China and the West will never be truly over, Airbus’s chief executive Guillaume Faury has said.
According to the chief executive, despite current economic and political tensions, the two blocks are too intertwined to sever all ties, as this would lead to a global economic collapse.
“I think a breakup of economic areas is unthinkable,” Faury told German business newspaper Handelsblatt. “I don’t think that is a realistic scenario.”
Nonetheless, he expects mutual dependency to be reduced in the long-term.
The EU plane manufacturer has a strong presence in China, as it holds a 50 per cent market share.
Earlier this month, China Aviation Supplies (CAS) – the state aircraft purchasing agency – bought 140 Airbus planes for a total of $17bn (£14.5bn).
Airbus has not reported “significant disruptions” to supply chains or manufacturing despite China’s strict non-Covid policy.
“What worries me more is when will air traffic in China recover,” Faury added. “The recovery is still very weak compared to the rest of the world.”
Beijing’s zero-Covid policy has also cost Hong Kong’s aviation hub status, after the number of passengers plunged to 1.35 million in 2021, forcing long-haul carriers such as Virgin Atlantic to shut the route later this year.
Even though it recently raised its free cash flow outlook to €4.5bn Airbus remains wary of political and financial headwinds.
“We are in a very unpredictable time,” he explained. “So we have to stay humble and show our resilience, like during the Corona crisis.”
Airbus has been hit by the impact of the war in Ukraine and the consequent surge in energy prices as well as a deterioration of already existing supply chain issues.
“For the first time since the 1944 Agreement on Free Air Travel, sanctions have closed the skies on this scale,” Faury continued.
“Western planes cannot fly over Russia, and Russian ones over Europe and North America. We never had that.”
The manufacturer is also facing significant headaches as a result of its ongoing trial against Qatar Airways.
The two sides faced each other on Friday as part of a £2bn dispute over grounded jets.
Qatar took the plane maker to court after its civil aviation authority grounded 29 of its Airbus planes due to a painting defect.
The Gulf carrier accused Airbus of influencing the EU aviation regulator, EASA, instructing it on how to respond to media queries while the plane maker argued Qatar had colluded with its regulator to improve its commercial position.
Both claims were denied on Friday in London’s High Court.