Despite uncertain times for the aerospace industry, Airbus’s outgoing CEO Tom Enders is still smiling.
When we meet Tom Enders, CEO of Airbus, he is gearing up to do one of his favourite things (which he describes as a nod to Point Break): “Jump out of a perfectly good airplane.” In the coming days the 60-year-old plans to leap from the A400M, Airbus’s four-engined military transport aircraft. For the leader of one of the biggest and most important aerospace companies in the world, it seems a fitting way to blow off steam. Coming straight from a board meeting in London, Enders is calm and even softly spoken at times, despite the fact that, as we chat, change and uncertainty are swirling all around. The UK’s withdrawal from the EU continues to generate region-wide turbulence, global markets are jittery amid trade tensions and fears of a coming recession, and the news about the environment grows more concerning by the day. For the aerospace industry, all are highly pressing concerns. Yet Enders is optimistic. “It’s an absolutely fascinating time right now,” he says. “I call what we’re in now the third revolution of aerospace.”
He points to the emergence of new technology being taken up by aerospace giants and start-ups alike – electrified propulsion, artificial intelligence and new methods of data-crunching, for example – all of which promise to dramatically speed up the rate at which aviation becomes more efficient and safer. “These things will have an enormous influence on how we develop and operate aircraft,” he says.
Enders has held key leadership roles at the company since 2000 and the top spot since 2012. But he’s due to leave the company in April, part of a management reshuffle at Airbus following allegations of corruption at the company. Enders is not implicated: he was involved in leading the company to self-report a series of discrepancies and has since tightened compliance procedures. However, his departure is seen by some as a way to clear the air and start afresh. (He’ll be replaced by French engineer and long-time Airbus executive Guillaume Faury.)
Since being appointed CEO, Enders has managed to grow the company’s revenue from €56.5bn in 2012 to €67bn in 2017, with a similar figure predicted for last year. In mid-2018, Airbus shares hit an all-time high after second-quarter profits exceeded expectations by €140m. For Enders, however, one of his major successes is having made the unwieldy firm a more integrated, global operation, breaking down some of the barriers that were there at the beginning.
“We started with a highly political company back in 2000; everything had to be balanced between France and [Germany],” says Enders. “Today if you ask me how many French or Germans we have in our executive committee, our management board, it’s not on our minds anymore. And that’s wonderful to see: that the company has really grown to be not just a European company but a more and more international company.”
While Airbus has Europe at its heart, it is now very much a global outfit and the company is working to nurture aerospace talent from outside the continent as much as possible. “I think integration in Europe is a prerequisite to be globally successful – but it’s no longer enough,” says Enders. There are collaborations on research and development in Japan, an engineering centre in India, final assembly lines in the US and China and, since it took a majority stake in Bombardier’s CSeries programme in 2017 (renaming the aircraft the A220), a manufacturing facility in Québec.
So Enders naturally sees it as an unfortunate turn of events that there has been a trend towards protectionist policies, particularly in the US and EU. “I remember Bill Gates saying once that the first worldwide web was not the internet, it was international air travel, connecting people, cultures, economies, in a hitherto unknown way,” says Enders. “And protectionism is not good for the industry.”
The UK’s vote to leave the EU has been another hugely complicating factor. Airbus is best known for its commercial aircraft but it is also an important player in the defence and space industries, and the UK is one of its major bases for design and production. It currently employs some 14,000 people across England, Scotland and Wales and is the UK’s largest space company. The wings for every commercial aircraft in the Airbus range are made in England, making the UK a fundamental piece of its supply chain. “It took us a while to make it a really cross-border integrated company, which is why, by the way, it’s so painful for us to see Brexit coming. Because obviously the UK was, and still is, a very integral, important part of the company.”
Then there’s the emergence of other native aircraft programmes – especially in China – which are posing a growing threat to the Airbus/Boeing duopoly. “You don’t need to be a genius to predict that China is coming with its own programme. Behind that, maybe, a programme with the Russians in long range,” he says. “It takes them longer than some people probably expected because the entry barriers in our business are still pretty high. But they are on their way.”
Despite all this, Enders sees aerospace as ripe with opportunity. “This is still an industry that’s poised for significant growth.” His numbers show a demand for about 37,000 new aircraft in the next 20 years, many of which will be headed for Asia. Airbus is in a position to capture a sizable piece of that market. The caveat, he says, is that all that potential is contingent on figuring out how to reduce the environmental impact of aviation, so one of the company’s more ambitious targets is to help the industry become carbon neutral in the next decade.
“If we want to keep our licence to churn out hundreds and hundreds of aircraft every year from our factories, we, Boeing and, eventually, our Chinese friends and others, need to take drastic action to reduce the environmental footprint of our products.”
As a result, Airbus – like most other aerospace companies – is pouring money and brainpower into making its products more environmentally friendly. It’s hedging its bets by investing in a wide range of possibilities, including electric, hybrid and hydrogen fuel cell technology, and biofuels using algae. However, Enders says that it needs to be a multi-pronged approach, with governments doing their “fair share” too. He points to the nationally fragmented air-traffic management system in Europe as an example. “Everybody knows we could easily cut emissions in Europe by at least 10 per cent if we had a state-of-the-art system. And 10 per cent is a lot in terms of tonnes of fuel.”
Enders says he has worked hard to keep Airbus nimble and innovative as it has grown by making sure the company is “not entirely risk-averse”. Certainly, Airbus has found ways to make things difficult for its main competitor, Boeing. In what will surely be chalked up as one of Enders’ greatest successes during his time at Airbus, the decision to launch the re-engined A320neo series effectively forced Boeing to do the same to its 737 in its re-engined 737-Max; some would say it has been playing catch-up in that market segment ever since.
Both aircraft are extensions of the two manufacturers’ “bread and butter” line-up of single-aisle jets, and both have had massive sales success (Airbus has a roughly 60 per cent market share as of now) but Enders thinks the A320 has the edge going forward. “We have a backlog of more than 5,000 aircraft on the 320neo, something even the greatest optimists back in 2010 would not have foreseen,” he says. “And the good thing is we are not at the end of what we can do with this aircraft. It still has potential.”
Building on existing models to address changing needs is something that Airbus has done well. The A321neo is another example – the longer sibling of the a320neo, it features an extended-range “LR” version that can fly up to 4,000 nautical miles (an even longer-range example is rumoured to be in the works, though Enders wouldn’t confirm). It is large enough and can fly far enough for Enders to believe that it is sufficient to fill the much-discussed (in aviation circles, anyway) middle-of-the-market gap in between single-aisle short-haul and smaller long-range wide-bodies. Through November 2018 it had delivered 105 and there are another 2,110 on the books. “The other side has spotted a gap in its product portfolio in the middle of the market, as they say, but we are already there with very competitive products,” he says. “I have no doubt that Boeing will eventually come [up] with a very interesting plane but we’ll watch and see.”
That said, Airbus has struggled with some of its other aircraft. A380 sales continue to lag and speculation is mounting that the programme may not have that many more years left, while the A330neo, another re-engined iteration, has entered service but without the kind of orders that Airbus expected.
Enders admits that the jury is out on the A380 but insists that the latter will eventually be a success. However, in general its planes are doing well – it has a total order backlog of 7,337 aircraft, or about nine years’ worth of production – and the A350, the future of long-range aircraft at Airbus, is proving itself highly capable and very popular. The outlook is, on balance, positive.
As the interview draws to a close, Enders returns to the topic of what an exciting time it is for the industry. “I think we haven’t seen this level [of innovation], probably, since the Wright Brothers.” At the time, about 100 years ago, there were many companies getting excited about building new flying vehicles, he adds – and that’s happening again.
“For me, it’s time to leave. But it’s a great time to be in aerospace.” He smiles before adding: “You ain’t seen nothing yet.”
1970: Airbus emerges onto the commercial aviation scene as a newly formed pan-European potential challenger to US dominance in the sector. It does this with the launch of the widebody A300, a two-engined plane designed to be a lighter, more efficient version of the three-engined widebodies of the day. It pioneered the use of composites in aircraft frames and featured an advanced auto-pilot, a precursor to later fly-by-wire advances.
1987: The first flight of the A320, which would go on to become one of the most successful aircraft models of all time thanks to more than 12,500 orders. It introduced the now-standard Airbus fly-by-wire technology, digitising and employing computers in the flight deck to an unprecedented extent.
1991 and 1992: The A330 and A340, respectively, are launched, one with two engines, the other with four, taking Airbus’s widebody aircraft to the next level of efficiency and technological advancement. The a330 would go on to sell 1,715 units and is still in production.
2005: The A380, still the largest passenger airliner in the world, takes its maiden flight.
2013: First flight of the A350 XWB, a plane designed to take on Boeing’s 787 Dreamliner. It employs a wide range of advances, including composites and the latest engines, to make it lighter, stronger and quieter, with a 25 per cent reduction in fuel burn versus aluminum aircraft of a similar size.
2014: The A320neo has its first flight, with 20 per cent fuel savings over the previous a320, as well as a longer range.
2016: Airbus delivers its 10,000th commercial aircraft, an A350-900.
2017: The A330neo takes its first flight, offering a 14 per cent reduction in fuel burn over the original A330.
48,000 employees, many at the company HQ in Toulouse, where assembly for every aircraft type in the commercial range takes place. Marignane is the headquarters for helicopter design and production, with 9,000 employees.
28,000 employees. The bulk of commercial aircraft work goes on in Hamburg, where sections of fuselage are built for many of the models; cabin outfitting and interiors are also handled here.
14,000 employees across 25 sites. The wings for all Airbus commercial aircraft are designed and manufactured in Broughton and Filton. Helicopters are designed and manufactured in Aberdeen, Belfast, Hawarden and Oxford, satellites and space-based telecommunications systems in Stevenage and Portsmouth.
3,200 employees. There’s a final-assembly centre in Mobile, Alabama, for the a320 family – and, soon, US-destined a220 aircraft – plus a design and engineering centre in Wichita, Kansas. Military helicopter production happens in Columbus, Mississippi.
Manufacturing of the a220 series takes place in Mirabel, Québec, after Airbus took a majority stake in the Bombardier programme. Employs 17,000 people indirectly.
Works with 45 suppliers in India, employing 6,000 people on Airbus projects. They work on engineering and IT services, aero-structures, materials and cabins. An engineering facility in Bengaluru employs 400 engineers.
1,900 employees. Airbus has a final-assembly line in Tianjin, opened 11 years ago, making a320 family aircraft bound for Chinese customers. It also recently opened its first widebody centre outside of Europe, also in Tianjin, where a330s for Chinese customers undergo painting, testing, cabin-outfitting and delivery.
There is a helicopter support facility in Kobe and a logistics centre in Tokyo; the company also collaborates with Japanese researchers and engineers in studying composite materials and structural health-monitoring technology, the use of humanoid robots in aircraft assembly and high-speed land transport.
Staying ahead of the competition isn’t just about being first with the next aircraft model: it’s also about digitalisation. In particular, Enders says, having a smart approach to using the mountains of data that an aerospace company produces and collects.
Airbus is developing an open-source platform called Skywise, which is aimed at collating and sifting through data from various aviation players. Until recently, no one knew how to use all the data being produced at Airbus and 90 per cent of it would be discarded.
“The conventional wisdom is: ‘I need to own the data and keep it close to my chest,’” says Enders. “But I think it’s been proven multiple times now that that’s exactly not how data is best used.” With the new system, the more data you bring the more meaningful the results and the more value it holds. “It’s changing the way we develop aircraft; it changes how we support the airlines and so on. And it’s certainly the route for discovering new business – new services that are data-related that nobody thought of in the past. The results should be that aircraft are more reliable, and reliable aircraft make more money for the airlines. Aircraft will be safer. These are benefits for the whole industry – plus, of course, the end customer.”