Take a Seat

What is the significance of the Mexican market for Airbus Group?

Mexico is a particularly important and interesting market. Over the past 10 years, we have sold 186 aircraft in this market to three airlines: Interjet, Volaris, and VivaAerobus. Our forecast for Mexico is also impressive. According to the global market forecast published annually by Airbus, over the next 20 years Mexico will require 634 aircraft of more than 100 seat capacity. That is a huge market for us, and also in terms of homeland security, civil defense, and defense. On top of that, what is interesting about Mexico is that it is a growing industry; its aerospace sector has grown at an average of 15% per annum over the past decade and 20% over the past five years.

How are you taking advantage of the boom in this sector?

As a key part of this industry we have many suppliers that have developed a presence in Mexico. Probably the most important is the Safran Group, which has a plant in Chihuahua and manufactures a large proportion of the Airbus 380 harnesses. GE, too, is a huge provider for our Group, but we have many others in Mexico. We have developed our presence in Mexico with our facility of Airbus Helicopters in Querétaro. We have a sourcing base that is vital to our target of expansion in this area. We firmly believe that Mexico is the place to be today for aeronautics. In our Group, we have identified Mexico as one of the top sourcing countries in the world.

What are your expectations for the coming years?

If we look at our presence here directly, we generate about 380 direct jobs and about 5,000 indirect jobs with suppliers. The employment potential of the aeronautics industry is particularly compelling, especially for qualified technicians. The target is to develop this over the next few years, and we aim to be employing around 10,000 people indirectly by 2020.

How will you increase Mexican competitiveness?

One of the subsidiaries of Airbus Group, Airbus Defense & Space Mexico, has been recognized the last three consecutive years as the top employer in Mexico with the benchmark of the best HR practices in the country. This confirms that whatever country we happen to be present in, we are dedicated to the best practices in terms of human resources and staff development. Indeed, developing the team and exporting talent is crucial for Airbus. We have sent more than 40 technicians and engineers from Mexico to Germany for training at our facilities. They return to Querétaro knowing how to produce the emergency doors of the Airbus A320 that we are manufacturing there in the Airbus Helicopters plant.

How does this plant contribute to regional development?

When we invest in a country, many of our suppliers are keen to invest as well; in that sense, we are in a position to boost the sector broadly. This is crucial to the future of aerospace in Mexico. In fact, we work in an industry of very few major players. For aircraft of over 100-seat capacity there are only two players. If we look at the financial figures of 2013, the total backlog of our group was ‚¬686.7 billion on December 31, 2013. This means that our Group, in terms of backlog, represents more or less half of Mexican GDP. For a country like Mexico, having a strong relationship with a Group like ours is therefore key for the future development of its aeronautic industry. We contribute investment and push our supply chain to be part of Mexico. We also invite others to participate here in Mexico. We have a very good relationship with ProMéxico. We are working closely with the Mexican authorities to promote the Mexico of today, and the opportunities to invest here for tomorrow.

What is the performance of your green programs?

We were in fact one of the first companies to introduce green programs. In 2010, we worked with the Mexican government, specifically with Aeropuertos y Servicios Auxiliares (ASA), Interjet, and the Safran Group, to produce some Interjet Airbus flights with biofuel produced in Mexico, which has proved to be a real success. Now, we expect a bright future for biofuel in this industry. This said, our job was merely to demonstrate biofuel’s feasibility, and now the job of the politicians is to demonstrate that it can indeed become a valuable commodity for the economy.

How do you feel about the energy reform?

I would like to say that our Group was very impressed by the efforts of the current administration and the congress in 2013. Being able to achieve labor, telecoms, education, fiscal, financial, and energy reforms in just one year requires a highly mature political environment. We see the energy reforms as the best tool to increase the competitiveness of the country, by reducing domestic energy prices. I believe that the real challenge for Mexico is to not be competitive against China or India, but to remain competitive with the US. In my opinion, the energy reforms will contribute to this. Due to the low cost of energy in the US, it is booming again. It is a manufacturing economy, and Mexico has to be part of that and remain a key player for the US. This will be the direct impact of the energy reforms. For sure, if the energy reforms can increase GDP by 2% per annum, it would enhance economic performance notably. We are enthusiastic about what is happening in Mexico, and I am personally convinced that this is Mexico’s moment.

How will Mexico’s trade relationship with the US develop?

The two economies are deeply connected to such an extent that this will surely follow, and Mexico is also extending bridges with other continents, such as Europe. Our company is proof that links with Europe are growing. Don’t forget that the Airbus Group is really a European company with French, German, and Spanish participations, as well as UK interests. The success of Airbus in Mexico is clear evidence of the fact that there are many bonds between Mexico and Europe.

© The Business Year – April 2014