Airbus fights against Russia’s titanium embargo

Global aviation damage

According to the head of the aviation agency Guillaume Faury, such restrictive measures will not have a significant impact on the Russian economy, but will seriously damage the global aviation industry.

Mr. Faury made such a statement on April 12 at the company’s annual meeting of shareholders. He called the ban on Russian imports of titanium, which is used to build modern aircraft, “unacceptable” and suggested a shift to a policy of waiving all restrictions.

Titanium is almost indispensable in the aircraft industry. It is used to make propellers for engines, hulls, wings, pipes, lashings and many other parts. And so far it has not been included in the sanctions packages against Russia by Western countries. Perhaps this is because VSMPO-Avisma, the world’s largest titanium producer, is being located here.

Before the Russia-Ukraine crisis, this Russian company supplied 35% of titanium needs for Boeing, 65% for Airbus and 100% for Embraer. But about a month ago, Boeing announced it would stop buying metals in Russia to prioritize supplies from Japan, China and Kazakhstan.

In addition, the American corporation, due to problems with its new flagship Boeing 737 Max and due to the pandemic, has significantly reduced production, bringing only 280 to market last year. Airbus is even more dependent on Russian titanium as the European aircraft maker also plans to increase production of its A320 family.

At the end of March, Bloomberg reported that Airbus had started looking for alternative sources of titanium in the event of a supply cut from Russia. But, apparently, the search wasn’t very successful…

What should Russia do?

The editor-in-chief of the Avia.ru portal Roman Gusarov commented that the question is, should Russia respond to its unfriendly attacks aimed at damaging the Russian economy because Russia still needs it. must continue to supply titanium and titanium products and maintain its position in the supply chain.

Half of the world’s two major manufacturers of titanium – Airbus and Boeing – supplied by Russia. There is simply no other place to get such a large volume.

If Russia firmly refuses to export titanium. Of course, the temporary may create some local difficulties for that party. But in a few years, they will organize new technology chains, invest in other countries, and Russia will lose this cooperation forever and it will be difficult to get it back.

Recently, the Russian government has just introduced temporary regulations for the lease and purchase of aircraft from unfriendly countries. Those regulations take into account both the interests of Russian airlines and the interests of Western lessors. The condition is: Either you have a representative office in Russia and we pay you in rubles. Or you open a representative office in a friendly country with us and we will pay you in that country’s currency.

The lessors can finally breathe a sigh of relief, as they themselves fear the plane will bounce back. And just like that, Russian airlines will be able to operate.

And if this stage is realized, it is the aircraft owners who will help Russia organize the supply chain of spare parts for their assets. Because, as long as the plane has no buyer, while it’s leased, it’s still their property. That’s billions of dollars. Ten new planes are approximately one billion dollars. Meanwhile Russia has more than five hundred such aircraft. Accordingly, they themselves will contribute to the organization of the supply of spare parts for maintenance through third countries.

It must be understood that the lessor is not an enemy of Russia and that they are not satisfied with the decisions of the political leadership of their country. So they will try not to speak loudly but will help Russia.

Here Russia is on the right track. The West is talking to Russia with ultimatums, while Russia remains ready to fulfill its contractual obligations. Russia has no plans to seize any assets. And this is a very good signal for global business as a whole, and Russia has also made it clear that there will be a suitable option for both parties. And this process is happening slowly now. The Airbus CEO’s statement is also a good sign in this sense.