Exclusive: Customer preference is A380's key asset: Airbus President

Exclusive: Customer preference is A380's key asset: Airbus President
Published: 13 November 2017 - 1:36 p.m.
By: Shayan Shakeel

It was bright and sunny last month when Aviation Business ventured to the sprawling acres that house Airbus’ headquarters in the south of France. Beset by greens, Airbus’ vast campus is a picture of corporate harmony; executives mill around and chill, working away on park benches in a scene that wouldn’t be amiss at a park, but with laptops and coffee.

But at the southern end of its campus, the company’s commercial aircraft president and industrial chief, Fabrice Brégier, sits next to a wall of glass, surrounded by charts and airplane models from where he coordinates 23,000 employees, including the factories barely a mile away. There, the rumbling of machinery and the thundering of engines are matched only by David Bowie blasting on the radio as engineers, weld, screw and assemble fuselages and wings before rolling aircraft out for test flights.

Brégier is on a mission. Europe’s largest planemaker, and one of the continent’s biggest manufacturers has carved out half of the global commercial aviation market. The company has an order backlog of over $1 trillion which means its factories are fully booked until well into the coming decade. But some of its customers have been vocal about delays in receiving aircraft. Its latest wide-body, the A330neo, unveiled as we met with Brégier, should have been completing certification. It only just began test flights.

“We need to stick to our commitments on deliveries,” he says when asked about how the company is faring in terms of production rates. “Our customers are growing more demanding, and in a sense they are right, especially with our launch customer for the A350. But we are improving progressively.”

Brégier has been the undisputed leader of his domain for a while, as the Financial Times describes him. But hurdles tend to emerge when you launch big programmes, he acknowledges. “It can be a painful process sometimes. Industrial ramp up was difficult last year on the A350 because of cabin suppliers, though we still managed to nearly match our delivery target of 50 aircraft with 49.”

“It’s why I enacted a drastic change in the organisation internally as well as with suppliers and how we manage customer relationships,” he says. “Our priority is to stick to what we promised in terms of deliveries of more than 700 aircraft to customers. It is largely limited to single-aisle, but what was supposed to be smooth is difficult on the A320 because the newer engines are coming in late and in lower quantities.”

Getting all the elements together to make sure deliveries are on time is the main challenge right now, he says. But at the end of this year, Airbus will be close achieving that, at least on the A350, says Brégier. 

“Our aircraft fly 14 hours a day, possibly more than the B787, at 99 percent reliability, putting the A350 in the category of the best aircraft in the world. Is it enough? No. We need to continue improving. But I think at the end of this year, we will have an industrial system for the A350 fully under control including quality at ramp up.”

Of course, that’s not the only challenge Airbus is most closely associated with at the moment. Certainly not in the Middle East, where in the run up to the Dubai Airshow speculation is running rampant about order prospects, and most importantly, the fate of the A380.

Airbus and its chief A380 customer, Emirates, have been embroiled in an ongoing and much discussed tussle: Emirates wants the aircraft to have better efficiencies and for the manufacturer to guarantee a future for the programme; Airbus can’t get other customers to buy but insists it continues to invest in it, despite planning to cut back production to eight per year.

“The A380 has been the backbone of the success of Emirates. And we have difficulties in understanding why other companies could not do the same. There are other big hubs and airlines with lots of appetite, and our challenge is to promote this product and continue to invest in it,” says Brégier.

Airbus’ recent announcements have acknowledged the A380 might need to deliver more to attract customers. At the Paris Airshow, the company announced the ‘A380 Plus’ with modifications to the wings and cabin that would improve fuel burn by 3.5 percent, reduce costs by 14 percent, and incorporate 11-abreast seating in economy for more densities in economy.

“I think they [Emirates] are right to ask for evidences that we fully back the A380. And this is the case; we continue to invest in improving the operational reliability which right now is at a very high level and we have offered upgrade versions,” says Brégier.

The problem, according to Brégier, is that customers are focused on the premium proposition they to offer to their passengers. “They say we are prepared to offer 10 abreast, but at a big differential of quality and comfort compared to other airlines. This is despite our belief that an efficient high density A380 will still be in all cabins more comfortable than any other aircraft in the world.”

The current low-yield environment is pressuring the A380s biggest customers, even more so with the onslaught of low cost long haul carriers that are beginning to emerge. But Brégier insists the A380, even at its highest levels of density, can still offer a much above par passenger experience. “At 11 abreast, you can certainly deliver premium at very competitive costs, and compete against low cost long haul which are so far limited in capacity.”

Brégier is confident the A380 will be able to attract more customers soon. “We have other strong customers [besides Emirates] including British Airways and Singapore Airlines, which has just placed an order for another five aircraft. And the Chinese market is just beginning to open up. We also continue to speak with new potential customers. If you ask passengers, they spontaneously say they prefer the A380.

“That,” he says,”is the key asset.”

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