VID YT AIRBUSAirbus China CEO on safety, tariffs and green transition

CGTN Europe

It’s an interesting time to be in charge of a huge aircraft business. At the Paris Airshow, Airbus China CEO George Xu took time to talk to CGTN Europe’s Iolo ap Dafydd about the opportunities – and problems – in his line of work.   #airbus #china #parisairshow

Transcript

00:00You're obviously an old hand at coming to this particular air show, what do you

00:04hope to see coming out of this show especially given a lot of instability

00:10internationally at the moment? I think the air show once two years it's a really

00:19very exciting moment for all the industry relevant ecosystem to gathering

00:25together to share the information to re-establish and strengthen the

00:32partnership and also very important to really discuss about the also those hot

00:40issues as of today and for this time I think we have quite a lot of the Chinese

00:48customers come to visit us in the Paris air show and we have also a lot of

00:56Chinese suppliers ecosystem they have a super interest to understand what's

01:01happening in this aviation world and what kind of role they can play and what kind

01:07of values they can bring to strongly support this ecosystem so we have a lot

01:14of meetings talks for all the supplies and customers side we'll get on to that

01:20but before we go on it's hard to ignore that horrific crash the Air India crash

01:26in in northern India how much of an impact does that have do you think in general on

01:30the aviation industry I think first of all we should pay a huge condolences to

01:38all the lives lost in this aircraft accident and also to all of those people their

01:47loved ones their family members I think it's a very bad moment for all of them

01:54we should pay our heartfelt condolences to them the second thing is that I think

02:03safety is always the top priority of this industry no one should ignore the

02:11safety look at what the loss impacts on the global industry and also on the

02:19on the human being on the families we should understand safety is really the

02:25most important priority of this industry and by the way I think now there is

02:32investigations already started at this moment we shall refrain ourselves in

02:38terms of speculation of a root cause or reasons for this tragedy but we will

02:45keep a close monitoring to see if there are any conclusion on this accident I

02:51think it's lessons in this industry we all need to learn in order to keep the

02:58safety record and keep the confidence of the effort air travelers as you say it

03:07doesn't help to speculate it is too early to look at what this investigation will

03:11will actually decide and agree on does it though do you fear undermine consumer

03:18passengers confidence as I say that we are all look after the investigation results

03:25and I think to have an investigation result and have all the industry to look at it

03:33find a ways to cure those root causes it's really helped to enhance the

03:42travelers confidence on the air travel you mentioned that there are lots of your

03:47countrymen here lots of people from different companies in which sectors are

03:53they actively being interested in all this heightened interest from China I think

03:59the first thing they are interesting is that you know China is a huge market there

04:04is a strong demand of aircraft after the COVID I think most of the Chinese

04:12airlines come here to look at the OEM and discuss with OEM to see whether there are

04:21cooperation opportunities we win-win opportunities with each other it's not

04:25only limited to those passenger aircraft narrow body or wide body it could be

04:31also extended for cargo aircraft they are not only talking about the aircraft it

04:36could be also extended to the services because when aircraft has delivered to

04:42customer they need OEM support a lot technically yeah and the support and

04:48services is super important for them to run the aircraft in efficiency and safety

04:55way so there are a lot of discussions on this type of things also on the supply

04:59side you see there are definitely they have a lot of interesting I will and what are

05:05the opportunities that you see for Airbus in China with this interest the

05:12the situation is that the first of all China market used to be 20% of the

05:18global market our market forecast says that will continue to be 20% of the

05:24market in the next 20 years and if you look at the China fleet today Airbus China

05:32fleet is already the largest single country Airbus fleet however the domestic

05:38travel has not yet become the biggest one they will become biggest one in the

05:45earliest of the 2030s and the international traffic is also growing very fast so I

05:52think it definitely is a huge market potential here but we come to work with

05:59China as a long-term reliable partner with China is not only because of the market

06:04even it's a bit super important but it's also because in this market we find a lot

06:11of competitiveness resilience in the current supply chain of course we need to

06:17co-develop it together with our partners here in China another thing we are

06:22super interested about is really on the innovation side as well where we need to

06:28thinking about how to leverage the China tech strength for the benefit

06:34of Airbus competitiveness in the not only short term but also in the long term

06:41future so you're looking long term long term does that mean having more

06:46production of Airbus aeroplanes and passenger airlines inside China and what's

06:51your strategy there how will you expand that definitely at this moment there is a

06:58huge explosive global demand on both narrow body and wide body aircraft on both

07:05passenger aircraft and the cargo aircraft so one of top strategical priority of this

07:10company as Airbus is try to make a smooth industrial ramp up to meet all those

07:18customer demand China is a imperatively important role to play in this industrial

07:25ramp up we have line one one line in China for the single eye aircraft final assembly we

07:33are in the process to develop a second line with two lines that means we are almost 20% of the

07:40global single eye wide narrow body manufacturing capacity which fits quite well with the

07:4820% of the global market so what I want to say is that industrial ramp up is top right or priority of

07:57this company and we are imperative part of this industrial ramp up and do you

08:04foresee or would you like to see in the future extending that to have more than two

08:10lines of production in China I think at this industry we need to first focus on the

08:17quality than the speed we have the line one start operation at 2008 it deliver a lot of success

08:25which convinced us that we have a right partnership with our Chinese partner we find the China market

08:32is really somewhere we need to we deserve to have further investment this is why we set the line two

08:39and the line two itself has not yet enter into operation it will and in operation at end of this year

08:47beginning of next year it will take time to really have reached the industrial maturity of the line two I think

08:56I think if that is a successful story again that definitely we are open to discuss further cooperation opportunities

09:08maybe not in the either another one line but there are many plenty of things into we can discuss how to cooperate to find the win-win solution

09:20because quite obviously China with its huge market is buying all kinds of airplanes and we'll have a contract in place to buy new planes

09:30we understand the negotiations are in place now so it sort of makes sense for you as chief executive of

09:38of of Airbus in China to try and develop an even bigger capacity inside the country doesn't it

09:45I would say that at this moment the what delivers around the 20 percent of the aircraft to China market

09:55which is let's say around 100 to 150 aircraft with the two lines we can fit this very well already

10:02you're in that negotiating period with with Airbus with China to buy and sell planes how far are you down that road

10:13you're talking about the negotiation with our customer exactly yeah I think if you look at the after Covid at 2023

10:23the the travel start to regain momentum for growth and 2024 the overall passenger volume has already exceeded the pre-Covid peak level

10:36but that is mainly contributors on the domestic traffic side on the international traffic it's still lag behind the pre-Covid level in 2024

10:48but look at the Q1 of this year things are totally changed even international traffic start to be exceed the 2019 level already

10:58so we see the market trend which gives our airline customers also a lot of confidence about the future

11:05I think they have a huge demand for single eye aircraft wide body aircraft and freighter as well

11:12so we have good products today of course the slots itself is a big issue where we don't have an early slot could be offered due to the constraint on the industrial run-up

11:29but in this case I think we are in the discussion with all the airlines let's see if there are good news we will immediately announce it

11:40I also want to ask you about the environment and about sustainability in aviation because there are as you know those targets in Europe

11:47that includes aviation to be net zero by 2050

11:51what does Airbus hope to do in general and also in China to try and increase more planes with lower emissions?

12:01Oh that is a very good question I think there are many ways to decarbonize in this industry

12:07by the way aviation is 2% to 2.5% of the global emission and which inside of it more than 1% is Airbus right

12:16so we bear the responsibility to decarbonize our industrial process our upstream supply chain and most importantly how to help our customer

12:30to decarbonize to decarbonize and one of the things Airbus could do is that develop a new generation of aircraft

12:37each aircraft generation will means kind of at least 15% of less emission so that is very important

12:46we can also use a new generation to replace old generation

12:50the second thing we can do is also like air traffic management how to optimize those kind of things can also help

12:59but the fundamentally if we want to achieve the ambitious target to reach carbon neutrality at 2050

13:08they provide taking the consideration that the global fleet double every 15 years

13:15that is a big challenge right

13:17it's a huge challenge

13:18it's a huge challenge

13:19so I think one of the fundamental solution technically also viable at this moment is really soft

13:27which means sustainable aviation fuel

13:30which will contribute a lot for this 2050 carbon neutrality ambition of aviation industry

13:38in the South industry we are facing two big problems

13:43one thing the availability

13:45one thing is affordability

13:48on the availability side

13:50actually these two questions is linked with each other

13:53if the production itself become bigger and bigger the price will go down

13:59what kind of role we as Airbus can play we play a role of a catalyst

14:05we want to promote the R&D of the SAF not only the SAF by using the oil but also other new solutions

14:19we want to promote the government of different continents to work with each other to develop the regulations

14:35to promote SAF production and also manufacturing and customer usage

14:42so we have many things please

14:45last question if I may

14:46so how much that could international tariffs and tax on goods in a way impact Airbus internationally

14:53that is an important question

14:56we are keep monitoring the evolution of all those trade disputes and the trade conflicts

15:06I think we are also systematically need to evaluate what is the impact

15:11not only on Airbus but on the whole industrial supply chain system

15:15in terms of cost in terms of operation disruptions

15:19what are the impacts

15:21and I think at this moment we see there will be profound impact on this industry we need to be handled

15:33I would say that the fundamental target of Airbus is really to urge the industry

15:40urge the government to go back to the 1979 civil aviation trade agreement

15:47which is the international agreement make the aircraft and the aircraft parts

15:53import and export duty free all over the world

15:56that is a fundamental important thing for the international life of the supply chain

16:05flourish of the whole aviation system

16:10and we want to go back to that one

16:13of course it's subject to a lot of negotiations between different nations

16:17we need to keep a close monitoring

16:19and try to be adaptable to all those changes if any

16:25we're able to watch more

16:28because they've redesigned

16:31you know

16:34you we want to do it

16:36for a investigative development

16:38let's assess

16:40you to listen and hear

16:41well

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