TOULOUSE, France – A hard Brexit could make Airbus reconsider its investment decisions to stay in Britain, a Philippine Airlines (PAL) top executive covering the United Kingdom and Ireland believes, but he expressed confidence that steps taken by Prime Minister Theresa May to ease apprehensions of businessmen about their future—if they stay—are on the “right track.”
Asked if Airbus might relocate if there’s a hard Brexit, David Cochrane, PAL country manager for the UK and Ireland, said: “There’s a possibility, if there’s no business-minded solution, that we reconsider our investment decisions. And some investment decisions need to be made this summer,” he said during an exclusive interview.
Later in the interview, he gave a very telling illustration of just how much a hard Brexit could impact the multicountry plane manufacturer’s operations. At least two Airbus A320s are finished in Toulouse daily, but all the wings are done in the Britain plant (the other parts are done in several other countries). Thus, if a hard Brexit results in seamless border crossings becoming all tangled up, the delivery of such wings could be delayed, with serious consequences on the Airbus production timetable.
He said Airbus employs 10,000 people in the UK, but declined to say how much investment they have there since it is considered classified, except to say all wings of the Airbus family of aircraft are manufactured in Britain. Despite acknowledging the possibility of investors reconsidering their continued stay in Britain, he pointed out that there’s a white book being circulated in Parliament.
“But with the current white book by Theresa May, we see it on the right track so she is, I would say, pragmatic. Business-minded people have a hand in writing this white book where we could arrange our future with the UK.” A white book, which he said is also called a white paper, is defined as “a book of rules, standards, or records, especially an official government report, bound in white.”
In England and Wales, it is a book setting out the rules of practice and procedure in the Supreme Court.
Hard Brexit
A hard Brexit, according to Cochrane, would mean the shipments of parts made in the UK bound to France would have to undergo customs procedure at the border. This could mean delays in the movement of goods and people.
“That would have a serious impact on business. A hard Brexit would bring the UK competitiveness down, so no solution, no agreement.”
“Very sensitive, lots of certifications are done by British authority and accepted by IASA. If you rip this apart and certifications do not acknowledge each other anymore, then you have to open lots of envelopes and it would cost significant delays and impact,” Cochrane added.
IASA is the International Aviation Safety Assessment Program established by the US Federal Aviation Administration in 1992 in a bid to determine a country’s ability to adhere to standards and recommended practices for aircraft operations and maintenance.
Asked what Airbus is doing to mitigate a hard Brexit, Cochrane said: “We’re voicing our opinion very clearly—that a hard Brexit erasing cross-border patrol, would cost us significant impact on cost and efficiency.”
“Of course, we would try to mitigate it, but it would mean additional burden to build up stocks. To build up reserves with a very short delay, we have nine months to go with that Brexit, so this could cost disruption and as a consequence if it comes hard, we would consider investment decisions this summer,” he said. On the other hand, he said that if it is a ‘soft Brexit,’ which he noted is Prime Minister May’s option, “there would be a kind of customs union so we would have smooth cross-border traffic.” That means doing away with the tedious and time-consuming customs procedures on people and goods.
Stuck at border
A dire scenario would be having Airbus parts stuck at the border.
To illustrate the possible scenario, Cochrane said two A320s are finished daily in Toulouse and if the wings are stuck at the border, then production would stop.
To mitigate the impact of that scenario, Cochrane said: “Then we need to build up security buffers to get our production flow going.”
In anticipation, the PAL executive said their procurement and political affairs people are working on scenarios “but we all hope and heavily argue for soft Brexit, which means recognition of each other’s certifications and seamless cross-border traffic, no customs control, no passport control.
At the moment, the PAL delegation that flew here to pick up the brand-new A350XWB experienced delays at Customs while entering France from Heathrow Airport in London. Cochrane said the bottleneck is caused by extraordinary laws being implemented to prevent terrorists from entering France, “but it gives you a glimpse of what you could get as a UK citizen when Brexit really happens, because if we separate, we definitely have those controls.”
Cochrane said the UK manufactures all the wing components of all Airbus airplanes. “All Airbus wings are made in the UK, we are very dependent on British seamless deliveries.” The entire Airbus group of companies, which is also engaged in the manufacture of helicopter, defense equipment and aerospace, has 133,000 employees across the globe. Of this, 60,000 are in the manufacture of commercial aircraft, Cochrane said.
“In Toulouse we have 17,000 employees and some 30,000 more if you include the suppliers. Very interesting times.
“We also have a supplier in the Philippines: 1700 employees manufacturing galleys for the A330,” he added.
The company’s main civil airplane business is based in Blagnac, France, a suburb of Toulouse, with production and manufacturing facilities mainly in France, Germany, Spain, China, United Kingdom, the United States and the Philippines.
PAL takes new plane
Meanwhile, PAL President and COO Jaime J. Bautista is leading the Philippine delegation to take delivery of the first of six A350-900XWB.
He said that with the addition of one of the most modern aircraft in the world, PAL is on its way to attaining a five-star status, “carrying the collective aspirations of the Filipino people.”
The delegation, which includes top executives of PAL, Civil Aviation of the Philippines technical people and Philippine journalists, toured the sprawling Airbus facility on Friday.
In a separate hangar stood the freshly painted PAL A350, majestic, a class of its own, dwarfing the people craning their neck to view the newly designed “winglet” which mimics a bird’s wings in flight, adjusting to turbulence and reducing the bumpiness.
There’s also the distinctive logo of the Philippine flag painted on the tail section, the wingtips, and, for the first time, under the belly. “So that people who look up to see a passing plane would immediately recognize the country’s flag carrier,” Bautista explained.
Heeding a passengers’ survey citing comfort as the number one consideration when flying, the A350 has the quietest cabin in its class, and the lowest cabin altitude pressurization.
“The air management system helps passengers to enjoy a more relaxing flight,” goes the blurb, as the cabin air is renewed every two to three minutes in a draft-free environment at the optimum temperature.
PAL’s A350 is the only aircraft with three business-class seating configuration; business class, premium and premium economy.
Since jet lag is one of the most pesky effects on passengers, the new plane dealt with it by “mood lighting.”
There are 16.5 million hues, “to create individual mood lighting ambience to foster well-being for passengers through every phase of the flight.
The variable lighting mimics the natural sunrise and sunset to help reduce the effect of jet-lag.
Image credits: Recto Mercene