Flying high on back of cultural diversity

Airbus reaps rewards of strong partnerships, says its top official

Fabrice Bregier, president and CEO of Europe-based Airbus SAS, the unit of Airbus Group SE that makes civil aircraft, is proud of the company's cultural diversity.

"It is an integral part of the Airbus DNA, but more importantly, a core success factor," Bregier said.

The company's multi-cultural workforce exceeds 55,000 people, from more than 100 countries. In Beijing alone, it has employees from 20 nationalities.

The Toulouse-headquartered company became the first truly global aircraft manufacturer in September by launching a final assembly line in Mobile, Alabama of the United States.

Seven years ago, the company made headlines after it set up its first aircraft final assembly line outside of Europe in Tianjin, a northern port city of China.

Its arch rival, the Boeing Co, has assembly lines only in the US.

It is strategically important to expand the company's industrial footprint in China and the US if Airbus wants to take the top slot in the global aviation market, Bregier said.

The US is the world's largest aviation market and China is the fastest growing one globally. "China will outpace the US within 10 years," he said.

The two factories outside of Europe are also integral to Airbus' plan of ramping up production of single-aisle A320s from 42 per month to 60 a month by 2019.

Bregier knows that it is no mean feat to achieve. But he is confident that it can be done.

"You need to have strong ties with your local partners and be with them from the start. After that, normally it works. We have showed that this can be done in Tianjin," Bregier said.

"It is part of the know-how of Airbus," he added.

Airbus was born in 1970 as a consortium of aerospace companies from four European countries - France, Germany, and later, Spain and the United Kingdom - to challenge the US dominance in the skies.

"To you from China, it looks like a small location on the map. But in reality, in Europe alone we have plants in four countries with different cultures and different expertise. Such experience is very useful when we have partners in China or in other countries," Bregier said.

"When we manage to align these cultures and integrate the people to make sure everybody would contribute to the success, we become very strong," he said.

Bregier spoke to China Daily recently about the company's business and partnership with Chinese manufacturers. Following are edited excerpts from the interview:

Boeing plans to build a completion center for B737 in China. Do you see competition between you and Boeing becoming stiffer in China? What are your advantages?

Beyond the quality of our products, our strength in China is that we have established, especially since 2005, a very strong industrial partnership.

We were the first and the only one to have a final assembly line in Tianjin. The assembly line is much more complicated than just equipping the cabins of single-aisle aircraft, which are pretty basic. We have delivered 250 Chinese-assembled aircraft from Tianjin.

Last July we also extended the successful partnership to a completion center for cabins of wide-body aircraft.

This one is also very complex, because wide-body airplanes fly longer distance and the cabins are much more sophisticated.

The facility helped support our commercial ambitions and our market share has risen in China. We now have more than 1,200 Airbus aircraft flying under Chinese operators.

Our market share has reached 50 percent from just 25 percent 10 years ago.

How do you maintain a healthy relationship with your Chinese partners, who are also your potential competitors?

You have to accept that one day there would be a strong Chinese competitor, because this market is growing and we will face more competitors than just Boeing.

COMAC (Commercial Aircraft Corp of China) is a competitor, but we partner with them on generic topics, like aircraft management and new alternative fuels. There's no contradiction to do this.

We have to decide on which segments we partner and on which activities we decide to compete. At the aircraft level, we compete, and we would not support our competitors to develop aircraft. But at equipment level, or regarding some design or development of cabin equipment, we are very pleased to do it with Chinese companies.

How has a slowing Chinese economy affected Airbus? How do you realign your business strategies in China?

The slowing Chinese economy doesn't affect the air transportation industry. The growth (of air transportation in China) this year is 12.5 percent, well above the GDP growth.

There are several reasons for that: First of all, the domestic market is still very active. The only constraint we face in the domestic market is with regard to the capacity of airports, air traffic management and slot constraints. In the international market, there have been big developments. For instance, because of the new visa policy in the US, I think air traffic to the US will increase by about 50 percent this year. The low fuel prices are also helping carriers to become more profitable. This is a good period for long-term investment.

But some say that because of lower fuel prices, carriers may not have any urgent need to upgrade their fleet with more fuel-efficient aircraft. What do you think about such comments?

In China, you have a big part of aircraft acquisition due to air traffic growth. When talking about the replacement of aircraft, we have not seen what you described.

When you buy a new aircraft, you buy it for the next 15 or 20 years. Nobody can say if the low fuel price scenario would exist for 15 to 20 years. So there is no impact on the procurement. Low fuel prices help airlines to be more profitable and to have more cash, so they are able to buy more aircraft.

How do you lead and motivate international staff?

I think this is a source of motivation for our people because working in an international environment is clearly more exciting. This is more challenging because people have different views and perspectives. But when you manage to align these cultures, you get stronger. I see it as part of Airbus' DNA and more importantly, a big success factor. When you have only one culture, you miss opportunities, and risks of becoming arrogant are more.

My commercial director is an American. He (Airbus sales chief John Leahy) is the best enemy of Boeing. One day I'm sure we will have Chinese or other nationalities at the top table of Airbus.

What is an effective leadership for leading a company? How has your style of management changed over time?

Effective leadership is motivating people and, in a big company like Airbus, aligning people on the same objective. It's also giving a vision to the group, making sure that people understand their future.

Style of management depends on the situation. When I was restructuring Airbus, I was probably seen as much tougher. Now the situation is much better. So I don't think there is just one unique style of management.

I tend to be a mirror to my people. I have to reflect to them. I have to give them as much as freedom in the areas I know they will do very well. I have to guide them, to control them, and to complement them when I believe they are less strong or focused.

When you choose a flight, is aircraft type part of your consideration?

Yes. When I can fly the A380, I prefer to fly A380. By the way, I know passengers love the A380.

A recent survey confirmed that 65 percent of passengers would make an extra effort to fly on the A380. I have met many people telling me "your A380 is fantastic".

What are your interests and hobbies?

I like to watch soccer games. I remember during the FIFA World Cup last year, I made a trip in China. I had asked Eric Chen (Airbus China president) to make sure I would have the games on TV live. It was 4 am when I was watching that.

What's your favorite team?

Marseille from France. When I was young this team was performing very well. Now they are not that consistent. I also like Barcelona very much.