Home' Asian Aviation : AAV July-Aug 2014 Contents 26 AsianAviation | JULY-AUG 2014
The historical division of Airbus among its
various government owners has been
challenging at times, but has also brought
advantages according to Simon Ward, vice
president international cooperation at the OEM.
"We are very used to breaking down work
packages and moving them around the world," Ward
said. "Internationalisation is part of our DNA."
Over the last ten years ago, Airbus has gradually
moved away from this politicized legacy. And this has
coincided with a shift eastwards in the company's
centre of gravity towards Asia.
There are a number of drivers behind this move,
Ward said. "Access to strategic markets -- and these
are moving to the East." And as this shift takes place,
it generates a "very competitive" industry.
"We are constantly seeking new suppliers, new
skills, and new technology," Ward said, adding that
another advantage is natural hedging against the
dollar exchange rate.
There are also opportunities to "grab natural talent"
in areas such as engineering and manufacturing,
which are becoming scarce in Europe, but have a
higher profile in places such as India.
Access to raw materials is also playing a role,
with Airbus keen to maintain supply. Russia has
60%-70% of the world's supply of titanium, for
Another advantage is financing. "An A330neo or
A380neo takes a lot of money. Money is becoming
increasingly difficult to tap into," Ward noted, adding
that Singapore and the Middle East were playing an
increasingly important role in this regard.
As well as opportunities, internationalisation also
brings risks for the supply chain. "When we look at
a country, we look at what the capability is, look at
what the aspiration is, and we look at what some of
the problems that country may have in building its
aviation industry up," said Ward.
Airbus looks across a broad range of factors from
raw materials, aerostructures, final assembly lines,
to training for pilots and training for aircrew. "We're
starting to think about how we deal with aircraft at
environmentally sound. When we break those aircraft
down into spare parts or back into raw materials,
we want to do it in an environmentally friendly and
professional way," said Ward.
Asia's role in the Airbus supply chain has
increased dramatically over the last ten years or so.
And Ward says that spend in Asia will grow the
fastest, "but all regions will obviously benefit from
growth in absolute numbers." Between 2006 and
2012, while Airbus revenues increased by 50%,
sourcing to Asia quadrupled.
Ward described South Korea as a "catalyst for
Airbus in Asia". Although the country does carry out
some fuselage work, the key role is geared towards
the wing, including wing ribs for the A330 and A350;
wing stringers for the A330; wing bottom panels for
the A320 family and A380; and wing top panels for
the A320 family. Korean Air Aerospace is single
source supplier for sharklets for the A320 family.
Ward said the striking thing about South Korea
was the professional way they carry out the work and
turn it into a seamless supply chain, as well as the
sheer rate of growth.
Another key Asian market is, of course, China.
From virtually nothing in 2004, the country will reach
US$500 million turnover in supply work for Airbus in
2015, with US$1 billion predicted by 2020.
Airbus has a final assembly line for the A320 in
Tianjin, and there has been speculation about a
similar set-up for the A330. "We have a number of
discussions with China on extending our footprint --
the A330 is one of those topics, but not necessarily
a final assembly line. It very much depends on the
market where we go and what is really interesting to
the Chinese Government. We won't know until next
year what we're going to do fully in China on the
A330," said Ward.
Airbus has built its market share in China up
from 27% in 2004 to around 50%."We have a
good relationship with the Chinese -- you don't get
anywhere unless you give something back," Ward
said. "China has big aspirations in the aerospace
Japan also features in Airbus thinking. "We would
be delighted to do more work in Japan -- but a lot of
companies are focussed on Boeing, and they are
very loyal," noted Ward -- ironically speaking the day
before Boeing announced the country would get a
21% workshare package for the 777X. "We'd love
to work with more Japanese suppliers -- we'd love
to talk to more Japanese suppliers and are actively
doing so now." ✈
AIRBUS INNOVATION DAYS
Asia is playing an increasingly important
role in the Airbus supply chain, writes
ASIA'S INCREASING ROLE
IN AIRBUS GLOBAL SOURCING
YEAR TOTAL GLOBAL
( BILLION) ASIA
Korean Air Aerospace is the sole source supplier for sharklets for the A320 family
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