Geopolitical risks and business challenges
By Tim Hepher
Impact of US-China Relations
PARIS, Jan 25 (Reuters) – The boss of Airbus warned his staff that the aircraft maker must be ready to adapt to worrying new geopolitical risks after facing “significant” logistical and financial damage last year due to U.S. protectionism and trade tensions between the United States and China.
Lessons from Recent Recalls
“The start of 2026 is marked by an unprecedented number of crises and worrying geopolitical developments. We must proceed in a spirit of solidarity and autonomy,” CEO Guillaume Faury said in an internal letter seen by Reuters.
Focus on future aircraft development
“The industrial landscape in which we operate is fraught with difficulties, exacerbated by the confrontation between the United States and China.”
Airbus declined to comment on its internal communications.
Faury did not identify any geopolitical developments in the memo, which was released last week amid disunity between Washington and its allies over Greenland and the role of NATO. Airbus is a major European defense equipment manufacturer.
He said the multiple commercial pressures had already “caused significant collateral damage, logistically and financially”.
Last April, US President Donald Trump announced drastic tariffs, leading to Chinese restrictions on rare earth exports. Washington then temporarily froze exports of engines and other key components to China, which uses them for its C919 jet. American parts are also needed for Airbus planes assembled in China.
The aerospace industry has obtained a partial reprieve from US tariffs.
Despite the commercial upheavals, Faury congratulated the group’s 160,000 employees for what he described as overall “good results” in 2025, without elaborating. Airbus publishes its results on February 19.
Airbus Defense and Space “is now on much stronger footing thanks to its deeper restructuring,” he said. Airbus Helicopters is “remarkably consistent in the strength of its performance.”
RECALL OF LESSONS
Faury said it was “imperative” that Airbus learns from the largest-ever recall in November, involving a software upgrade.
Days later, Airbus was forced to reduce its delivery targets due to faulty fuselage panels, but maintained its financial targets – in part, Faury said, to progress on a commercial cost-cutting plan.
“We need to be more rigorous in managing our systems and our products in general,” Faury said.
The chief executive said post-Covid supply chains had improved but remained a source of disruption.
“Our most serious difficulties are with the Pratt & Whitney and CFM engines,” he said.
Recently retired commercial CEO Christian Scherer said earlier this month that A320 family engines continued to arrive late and pointed the finger at Pratt & Whitney, which declined to comment.
Faury said he would focus on financial results for the rest of this decade, serving as a warhorse as Airbus and Boeing prepare for their next aircraft development battle.
The 2030s will be dominated by the development of an A320 successor that will enter service in “the latter part of the decade”, he said. Boeing is expected to follow a similar path, although it has said its near-term priority is reducing debt.
“Achieving profitable growth in the second half of the 2020s is essential: we must approach this crucial period (the 2030s) in a truly ‘Olympic’ form,” Faury told employees. “The future of Airbus will depend on our ability to implement this strategy.”
(Reporting by Tim Hepher; editing by Susan Fenton)