Airbus urges return to zero-tariff deal as first quarter beats forecasts
The head of Europe's Airbus called for a return to tariff-free trading for aerospace on Wednesday, joining a chorus of U.S. industry leaders seeking relief from a growing tariff war in which Airbus warned there could be "only losers".
CEO Guillaume Faury said U.S. tariffs and the prospect of European retaliation had not so far had a significant direct impact on supply chains and remained manageable for now, but that it was closely watching air travel, airlines and suppliers.
Unveiling stronger-than-expected quarterly results buoyed by defence improvements, Faury called for a return to a 1979 treaty between 33 nations that spared aircraft and parts from duties.
"The complete industry has developed itself around that concept, with a lot of back and forth across the Atlantic.
Given that situation, that's a benefit to everyone," Faury said. Aerospace sectors in the U.S. and European Union are each other's biggest customers, European officials say, even though they are home to bitter rivals Airbus and Boeing.
In Washington, an aviation coalition has been lobbying lawmakers and the White House to lift tariffs in favour of enforcing the 1979 treaty brokered by the World Trade Organization.
The CEOs of several companies including Boeing and GE Aerospace have directly raised the issue with U.S. President Donald Trump, who has said tariffs will increase U.S. jobs, according to a letter sent to Congress and lobbyists.
Faury said Airbus was talking to customers and suppliers, but ruled out picking up tariff costs for U.S. airlines taking jets from Europe, rather than Alabama where some get assembled.
Delta Air Lines CEO Ed Bastian said this month the carrier would defer deliveries rather than pay tariffs. Airbus said it was too early to quantify the impact of tariffs and reaffirmed 2025 guidance that ignores the trade war.
While sticking to a goal for 7% higher deliveries in 2025, Airbus signalled they would fall in the second quarter, having fallen in the first - leaving much to do in the second half.
It was unable to deliver 17 aircraft in the first quarter due to delays in receiving engines from CFM International.
Faury said the number of finished jets missing engines would rise again this quarter. "It will continue to get worse before it gets better," he told analysts.
"We think it will... be back to a normal situation at the summer." CFM, co-owned by GE and France's Safran, reiterated that it was confident of accelerating output in the second quarter.
Airbus, which finalised an agreement on Monday to take over part of ailing Spirit AeroSystems, said the U.S. aerostructure supplier's challenges continued to pressure the ramp-up of the Airbus A320 and A350 jets.
For the first quarter, Airbus said underlying operating profit rose 8% to 624 million euros ($707 million) and revenues gained 6% to 13.54 billion euros.
Analysts had on average expected core profit of 602 million euros on revenues of 12.95 billion, according to consensus data compiled by the company.
Airbus burned less cash than expected.
Airbus struck a more positive tone over future production of the troubled A400M military airlifter, saying it was in "constructive" talks with European purchasing nations. The A400M has been hit by delays, partial cancellations and slow exports, with orders due to run out in 2028.
But industry sources say higher European arms spending could revive interest from buyers that curbed deliveries, such as France and Spain.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Observer
a day ago
- Observer
Is Europe facing civil war?
Whether the debate is occasioned by a polemical book or a movie like last year's 'Civil War', I consistently take the negative on the question of whether the United States is headed for a genuine civil war. In those debates, it's usually liberals warning that populism or Trumpism is steering the United States towards the abyss. But with European politics the pattern is different: In France and Britain; and among American observers of the continent, a preoccupation with looming civil war tends to be more common among conservatives. For years, figures associated with the French right and French military have warned of an impending civil conflict driven by the country's failure to assimilate immigrants from the Muslim world. (The great reactionary novelist Michel Houellebecq's 'Submission' famously imagines this war being averted by the sudden conversion of French elites to Islam.) Lately there has been a similar discussion around Britain touched off by an essay by military historian David Betz that argues that multicultural Britain is in danger of tearing itself apart and lately taken up by political strategist, Brexit-campaign architect and former Boris Johnson adviser Dominic Cummings in an essay warning that British elites are increasingly fearful of organised violence from nativists and radicalised immigrants alike. When I've written skeptically about scenarios for a US civil war, I've tended to stress several realities: the absence of a clear geographical division between our contending factions; the diminishment, not exacerbation, of racial and ethnic polarisation in the Trump era; the fact that we're rich, aging and comfortable, not poor, young and desperate, giving even groups that hate each other a stake in the system and elites strong reasons to sustain it; the absence of enthusiasm for organised communal violence as opposed to lone-wolf forays. Does the European landscape look different? On some fronts, maybe. Tensions between natives and new arrivals are common on both sides of the Atlantic, but ethnic and religious differences arguably loom larger in Europe than they do in the US: There is more intense cultural separatism in immigrant communities in suburban Paris or Marseilles than in Los Angeles or Chicago, more simmering discontent that easily turns to riots. At the same time, British and French elites have been more successful than American elites at keeping populist forces out of power, but their tools — not just the exclusion of populists from government, but an increasingly authoritarian throttling of free speech — have markedly diminished their own legitimacy among discontented natives. This means that neither underassimilated immigrants nor working-class whites feel especially invested in the system, making multiple forms of political violence more plausible: pitting immigrant or native rebels against the government, or pitting immigrants against natives with the government trying to suppress the conflict, or, finally, pitting different immigrant groups against one another. (English cities have already played host to bursts of Muslim-Hindu violence.) Then, too, Western Europe's economies have grown more sluggishly than America's for the last decade, reducing ordinary people's stake in the current order and encouraging alienation and resistance. Finally, there are arguably geographic concentrations of discontent — in the north of England, or in immigrant-dominated cities that Betz warns could become ungovernable — that don't exist in quite the same way in the US. All of this adds up, I would say, to a useful corrective to the progressive tendency to regard America in the Trump era as a great outlier, uniquely divided and deranged and threatened by factional strife, while liberal politics continues more or less as usual among our respectable and stable European allies. Not so: There are clearly ways in which Europe's problems and divides are deeper than our own, with economic and demographic trends that portend darker possibilities and the establishment attempt to keep populist forces at bay may end up remembered as accelerating liberal Europe's downfall. Yet many of the reasons to doubt the imminence of civil war in America still apply to Western Europe. The continent is more stagnant than the US but still rich, comfortable and aged; there's enthusiasm for rioting but rather less for organised violence; and for all the palpable disillusionment, it is hard to glimpse any elite faction yet emerging — right or left, nativist or 'Islamo-Gauchiste' — that would see violent revolution as an obvious means to its ambitions. Meanwhile, there are distinctive European conditions that make civil war less likely there than in the US: Smaller nations with more centralised political systems generally find it easier to police dissent and there's no Second Amendment or American-style gun culture to challenge the European state's monopoly on force. Ultimately, I agree with British writer Aris Roussinos, a pessimist but not a catastrophist, when he writes that the most likely near-future scenarios involve increasing 'outbursts of violent disorder' but not the kind of collapse of central government authority, complete with ethnic cleansing and refugee flows, that the language of 'civil war' implies. And that imprecision matters: As I've suggested before, if you use a civil-war framing to describe a world where rioting is more commonplace and assassination attempts and random forms of terrorism make a comeback, you're describing realities that big diverse societies often have to live with, using terms that misleadingly or hysterically evoke Antietam or Guernica. I don't think America in the 1960s and 1970s experienced a civil war, even though those were certainly chaotic decades. I don't think modern France, with its long tradition of student protests and urban riots, has existed in a perpetual state of civil war. And as we face a future that's clearly more destabilised than the post-Cold War era, it still behooves us to be realistic about the most plausible scenarios: We are still far more likely to be navigating a more chaotic landscape together, as fellow citizens, than shooting at one another across a sectional divide. — The New York Times
Observer
2 days ago
- Observer
Businesses welcomed the UK-EU Brexit ‘reset'
Prime Minister Kier Starmer will be pleased about his catch in international diplomacy: a trade deal with the European Union, which the government hopes will boost the chances of achieving higher growth. In an agreement that hands EU boats continued rights in British seas until 2038, slashing red tape on food checks and increasing cooperation on defence and migration, businesses are getting a sense of whether this deal may be sweet – or sound all too fishy. For the opposition political parties, the Conservatives and Reform Party, the Prime Minister has utterly betrayed Britain's fishing industry. The right to control Britain's waters was a clear prize of Brexit. Yet, under this deal, British fishermen will never know what it means to manage the fisheries of an independent country. EU excess has been extended and the economic future of Britain's coastal communities has once again been sacrificed, the opposition say. Furthermore, the UK has a once-in-a-generation opportunity to sweep away the EU- originated rules that suppress innovation, productivity and growth. Yet, this deal binds Britain back into precisely those constraints on agriculture, preventing the regulatory freedom that would allow Britain to thrive as an agile, competitive economy. However, Business groups and their members have welcomed the deal, but professor Stephen Miller, director at the National Institute of Economic Social Research, said that, economically the cuts in red tape secured were not likely to put much additional cash in people's pockets. Britain's Prime Minister Keir Starmer shakes hands with European Commission president Ursula von der Leyen at the European Commission headquarters in Brussels, Belgium, in this file photo. — Reuters 'This agreement is unlikely to 'shift the dial' in the sense that the gains are small relative to the single market or customs union,' he said. While the gains may be 'small', and despite agreements on areas such as a youth mobility scheme or defence lacking detail, industry groups are largely upbeat about the opportunities presented by EU and UK officials. The chief executive of Britain's biggest business lobby, the Confederation of British Industry, suggested the new deal was a 'leap forward' amid difficult times. 'The bleak global trading environment – from escalating geopolitical tensions to sluggish growth – has underscored the importance of deepening ties with trusted, like-minded partners,' Rain Newton-Smith said. This sentiment has been repeated by leading executives at the British Retail Consortium (BRC) and the Federation of Small Businesses (FSB) where leaders have said agreements will keep costs down and enrich British companies looking to import cheaper produce or export goods to European markets. BRC chief executive Helen Dickenson said the removal of veterinary checks on food would help secure supply chains and support UK competitiveness while FSB policy chair Tina McKenzie suggested that 'bottleneck at the border' could be cleared as a result of fewer checks being made. Managing director of M&S Food, Alex Freudmann also said 'pointless' bureaucracy in trade within the UK – between Great Britain and Northern Ireland – would be removed. But some elements of the trade deal were conspicuously absent. As well as the absence of progress of youth mobility, demands made by the Institute of Chartered Accountants in England and Wales (ICAEW) over the recognition of British qualifications, which are supported by other leading business groups, fell on deaf years. 'With elements not yet set in stone, there will be further effort required to ensure that what has been promised is delivered for the benefit of the UK economy, the business environment and wider business society,' said Emma Rowland, trade policy advisor at Institute of Directors (IoD). ING's James Smith suggested more negotiations on goods trade would have to be done for the OBR to raise its growth forecasts for the UK thereby easing concerns about extra tax hikes coming. 'Generally, we doubt this deal on its own will convince the OBR to change its outlook in any meaningful way,' he said.
Observer
2 days ago
- Observer
Bulgaria hails 'remarkable day' after EU green light
SOFIA: Bulgarian Prime Minister Rossen Jeliazkov said the EU's green light on Wednesday for the Balkan country to adopt the euro next year confirmed its progress. "A remarkable day. Another step forward on Bulgaria's path to the euro... This follows years of reforms, commitment and alignment with our European partners," he said in a post on X. The EU gave the green light on Wednesday for Bulgaria to adopt the euro on January 1, 2026, putting the Balkan country on course to become the 21st member of the single currency area. The European Commission said Bulgaria had fulfilled the strict criteria "intended to ensure that a country is ready to adopt the euro and that its economy is sufficiently prepared to do so". About 1,000 people demonstrated on Wednesday in front of the National Assembly building in the centre of Sofia, holding signs that read "Preserve the Bulgarian lev," "No to the euro," and "The future belongs to sovereign states." The gathering was organised by the opposition pro-Russian Vazrajdane party. — AFP
