Will European Aerospace Still Be Thriving In 25 Years?
Source: Aviation Week & Space Technology
Tom Enders, CEO of Airbus, gave his opinion on the future of European Aerospace Industry and the key challenges of the next 25 years.
In the mid-1990s, European horizons ended at national borders. Industrial consolidation on a national level was well underway but cross-border cooperation was limited to joint ventures in the fields of missiles, satellites and helicopters.
This changed with the big consolidation wave in the U.S., Boeing’s acquisition of McDonnell Douglas sent shockwaves through Europe’s aerospace boardrooms.
Fortunately, Europe’s response was decisive, with the full merger of three “national champions”—France, Germany and Spain—and the transformation of Airbus into a real corporate entity. There’s no doubt that without these daring moves, the European aerospace industry ultimately would have become irrelevant. Airbus would never have been able to catch up with Boeing.
The challenges of the past 25 years were primarily building size, integrating companies and operations cross-border, and extracting cost synergies. These efforts were largely successful, at Airbus and beyond.
The key challenges of the next 25 years will be fundamentally different:
- There will be unprecedented changes in technology that have already started to hit us: digitalization, artificial intelligence (AI), robotics and biotech. Data will play at least as important a role as propulsion or aerodynamics. The future competitiveness of European aerospace will be determined by their ability to harvest and utilize this data.
- Aerospace companies must adapt to tectonic shifts in the competitive landscape as powerful new players emerge, especially in China but maybe also from other industries.
- People will become even more important. In the era of globalization, competition for the best and brightest will intensify. And a whole generation of aerospace engineers is about to retire: 30% of Airbus’ workforce will leave in the next 10 years.
- They must speed up our transition toward sustainable flight. Air passenger growth is expected to keep doubling every 15 years. This is a great business prospect, but it is an even more important responsibility.
To meet those challenges, they must learn to work differently and experiment with new forms of cooperation. Airbus will never become an AI or machine-learning company, but they can forge smart partnerships with leading technology companies, as they did with Palantir. And speed is of the essence.
European aerospace needs to collaborate with different sectors, as Airbus is doing on the E-Fan X project with Siemens and Rolls-Royce. The industry is committed to achieving carbon-neutral growth in the next decade.
Second, aerospace businesses have traditionally been complex, bureaucratic beasts. Today, they need flatter and more flexible organizations. At Airbus, they unleash the full creativity of our people via open innovation platforms and “empowered” and “exponential” teams.
Third, and this is more of a consideration for European governments, Europe must strengthen its strategic capabilities.
Fourth, if in 20 years or so it will not be the U.S. or the EU but China that leads in big data, AI and machine learning. For European aerospace to stay competitive, it might not be sufficient to rely almost exclusively on European and North American partners and suppliers. That also calls for organizations that transcend geopolitical boundaries that have hitherto divided our industry into discrete blocks.