Commercial aircraft designer and manufacturer Airbus announced last week the creation of a dedicated commercial aircraft business unit to be headed by the company’s existing head of sales.
The news of this appointment was initially reported by Reuters, and coined as this plane maker’s: “biggest management revamp for years, as it juggles supply pressures with challenges in defence and space, industry sources said.”
Christian Scherer, the head of commercial aircraft sales has been appointed the new unit’s first ever CEO which reportedly will take effect at the start of 2024.
According to the Airbus announcement, this new business unit and CEO was created to ensure a dedicated operational focus for this business in challenging times, enabling Airbus CEO, Guilliame Faury to focus on the strategic, global and transformational agenda of Airbus.
“Empowering Christian in the Commercial Aircraft CEO role will enable us to reinforce focus on the success of our Commercial Aircraft business while allowing me to dedicate my time to steering Airbus in a complex and fast-evolving global environment,” according to Faury.
Since 2019, the leadership roles of Airbus and its Commercial Aircraft business were combined under the company’s CEO, providing alignment and speed of execution during a period of multiple crises and change
Global Production and Supply Chain Ramp-Up Challenges
According to a published report by Aviation Week regarding this carving out of this business unit, Scherer has demonstrated intimate knowledge of airline customer fleet and acquisition needs, along with aircraft development. He has led the company’s continual sales volume of the industry popular A320 single aisle aircraft family.
However, the various Airbus global-wide production facilities, many of which are dedicated to commercial aircraft monthly production, such as A320 family, are organized under the company’s group country organizations in France, Germany, the UK and other countries.
Thus arrangements are going to have to be made for a business unit voice in production and supply network strategy and decision-making.
A further open question is the ongoing management of suppliers as plans for ramp-up of production capabilities. In order to respond to the large backlog of aircraft orders, plans call for ramping up production of the A320neo family to 75 aircraft per month by 2026 from current levels of 40 today. Airbus has never achieved these monthly levels and a lot of planning and supplier discussion are ongoing to ensure that supply networks can consistently support such levels.
As Supply Chain Matters has highlighted that there are growing concerns regarding the quality and premature operational durability of the Pratt and Whitney geared turbo fan engines that are specified by airlines on various A320neo and A220 new or in-service aircraft. This can be a significant disruption for global airlines as in excess of 100 engines may be not operational because of required internal component inspections and possible repairs. It is still unclear if the availability of new engines will impact the 2024 monthly production plans.
From our lens, this organizational move makes sense and should have come earlier. With an estimated 70 percent of this aerospace manufacturer’s revenues coming from commercial aircraft, the CEO of this business unit will likely be cited as the second most powerful executive.
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