Airbus in better shape than feared but risks ahead, CEO tells staff

By Tim Hepher

PARIS (Reuters) - The CEO of Europe's Airbus has told staff that the group ended 2024 in better shape than it feared when cutting profit targets last summer, while warning of increased risks to its business from a worsening international environment.

Referring to group-wide performance, Guillaume Faury said in a New Year memo seen by Reuters: "From an operational point of view, we finished the year in a better state than we feared when we changed our guidance to the financial markets" in July.

An Airbus spokesperson said it never comments on internal correspondence.

Airbus this month reported 766 jet deliveries, just shy of a targeted headline figure of "around 770", while claiming victory due to a margin for manoeuvre in the language of its forecast. It remained ahead of rival Boeing for a sixth year.

Faury said activity would once again accelerate over the course of the year and insisted Airbus must improve quality and delivery timing. Industry sources say it is short of engines this month after racing towards the finish line in 2024.

Faury said Airbus Defence and Space and Airbus Helicopters had an "excellent commercial performance" in 2024.

But he called for vital progress in defence activities of both divisions and hinted that recent consolidation moves in space could seep into defence. He narrowed earlier definitions of possible strategic options to include new partnerships.

"We are also exploring a potential consolidation of our activities and possible new partnerships, particularly in the space business where we're suffering the most," he wrote.

In December, Reuters reported that Airbus, Thales and Leonardo were exploring a satellite partnership modelled on MBDA, the world's second-largest missile maker which is controlled by a trio of groups including Airbus and Leonardo.

A study carried out by Syndex, a consultancy that advises unions, said the MBDA model is most likely but raised concerns about the impact on jobs, according to a copy seen by Reuters. Airbus has already announced 2,000 job cuts in Defence and Space.

'DETERIORATING INTERNATIONAL ENVIRONMENT'

In the letter, sent to some 150,000 staff shortly before U.S. President Donald Trump was sworn in on Monday, Faury said Airbus faced a "worrying backdrop" and must be ready to respond rapidly to events but did not single out any specific situation.

"At the outset of 2025, we can all see that the international environment is deteriorating and growing in complexity. This is increasing the risks weighing on our activities," Faury said.

Trump, who has promised sweeping tariffs, stopped short of immediate duties on day one but directed federal agencies to investigate persistent U.S. trade deficits and unfair trade practices and alleged currency manipulation by other countries.

Faury told reporters earlier this month that European aerospace firms were bracing for "very strong" protectionism during the second term of Trump, who has defended the use of tariffs as part of his economic agenda to "put America first".

In June 2021, the previous Biden administration agreed a five-year truce first with the EU then Britain over a near 17-year conflict on aircraft subsidies that had led to billions of dollars in transatlantic tariffs on European and U.S. goods.

Trump's trade rhetoric has raised alarm in the industry that the truce could unravel, with the head of leasing giant AerCap telling Reuters last week that a new tariff war would hurt Boeing's efforts to recover from recent crises.

In another area of potential transatlantic tension, Faury, who has championed development of a hydrogen-powered plane, described climate change as a "critical challenge for humanity" and pledged to uphold environmental investments. He signalled a clampdown on other projects deemed more wasteful, however.

Trump on Monday declared a national energy emergency and announced plans to pull the United States out of the Paris climate agreement, echoing a step taken during his first administration and later overturned.

Aerospace firms are pledging massive investments in new engines and other green technology but the topic of curbing emissions has for the time being taken a backseat to jet shortages, delegates at a Dublin gathering said last week.

(This story has been corrected to say job cuts affect the Defense and Space division, not 'space activities,' in paragraph 10)

(Reporting by Tim Hepher, Editing by Louise Heavens and David Evans)