Airbus CEO Guillaume Faury warns that the introduction of tariffs in aerospace as a result of the two World Trade Organization (WTO) cases against the European Union and the US would be “just a disaster.”

“When we look at the systemic impact it is lose, lose, lose,” Faury said in an interview ahead of the Paris Air Show.  “We start to look at it as a serious threat, but I think there is still time to avoid it,” he said. “There are no winners. The day Europe retaliates the scenario is even darker ... We are calling for maturity. Europe will retaliate, there is no way any player will accept to be penalized by tariffs without retaliating and escalating.”

The US and the European Union (EU) launched cases against each other in 2004 claiming Airbus and Boeing, respectively, have benefited from illegal state subsidies. The WTO found different violations on both sides. The case against the EU and Airbus (DS316) is about eight months further advanced in the WTO process than the DS353 case against the US/Boeing because it was filed earlier—tariffs against Airbus imports into the US could therefore be applied earlier.

“It is a game with short-term gains for one side or the other, but the end is just a disaster,” Faury said.

The 51-year-old took the helm at Airbus in April succeeding Tom Enders. Although he quickly rose through the ranks at Airbus, Faury said that he “was not mentally unprepared. I had spent five years with the rest of the executive committee members discussing group topics.”

Modernizing the Airbus production system is one key focus for Faury. Airbus must move ahead without an all-new aircraft program on the horizon. Faury instead wants to use upcoming product upgrades as an opportunity to introduce upgrades. “There are different routes to come to the same target,” he said. “We have our platforms, we do upgrades of them and ramp up A320 family rates. We have introduced automation in Broughton on the wings and in Hamburg in hangar 245, which handles the assembly of the rear section of the plane and on the fourth final assembly line. We have other projects.”

Faury stressed, “I don’t think there is an absolute need for a new program to be able to develop technologies, tools, systems and processes. We are coming up with new variants of planes where we have opportunities to apply new ways of designing and producing.”

He said that “the passion for production systems came during my time in the car industry. I came back with a better understanding of it. It is not necessarily something people in aerospace are focusing on because we build wonderful complex machines in small numbers. But it is coming into aerospace now because of the demand, the rate increases, the pressure on quality and on-time delivery. Then we have digital, robotization, automation arriving. It is good timing.”

One opportunity to introduce changes is the possible A321XLR that Airbus may launch at Le Bourget. Faury said, however, that he wanted to answer more detailed questions about the A321XLR “at a later stage.” He said nonetheless that the aircraft is “about incremental change, it is much easier than a clean-sheet design. You are faster to the market, there is a lot of credibility, you have your suppliers.”

He also pointed out that the A321XLR could be quicker to the market than an all-new aircraft. “The demand is now,” he said. “The world is going more point-to-point. Long range with a single-aisle is a way to test new routes in a cost-efficient manner.”

Faury said Airbus is in favor of regulators forcing a certain level of sustainable fuel in aviation fuel. “We strongly believe in sustainable fuels. They are the way to go for the next decade, to start reducing emissions significantly before the next generation of propulsion systems are ready.” If their use was mandated more strictly “we could be flying a significant quantity of bio-fuels much earlier.”

The Airbus CEO downplayed the slow pace of orders this year that saw both Airbus and Boeing in negative net order territory through the end of May. “We don’t see it as a cycle indication but as a proof of a high level of competition in the airline market ... We see a lot of activity in the market, demand for single-aisles is still very strong despite our huge backlog,” he said.

Airbus is sticking with plans to raise single-aisle production to 63 aircraft per month in 2021 and will keep A350 production at 10 aircraft per month “for the foreseeable future.” Faury wants to stabilize A330/A330neo production at around 50 aircraft per year.

Jens Flottau,