Airbus revamps jetliner arm under veteran insider Scherer

By Tim Hepher

PARIS (Reuters) -Airbus confirmed the appointment of sales chief Christian Scherer as CEO of its core planemaking operation on Tuesday, restoring dedicated leadership of its main business for the first time in four years as it steps up jet production.

The world's largest planemaker said the move would free group CEO Guillaume Faury, who has combined the job of running the wider company with the jetliner business since 2019, to steer the group in a "fast-evolving global environment".

Scherer's appointment as Commercial Aircraft CEO, first reported by Reuters, will take effect from Jan. 1 after discussions with unions, Airbus said.

The shake-up propels a career-long insider to effective number two of Europe's largest aerospace group, allowing Faury to focus on its wider portfolio amid uncertainties over its future in space and the pace of development of a new fighter.

The appointment of Scherer, 61, heralds broad continuity inside the main commercial arm, which competes with Boeing and makes up about 70% of the company's revenues.

It comes at a time when the aerospace industry faces widespread disruption in the global supply chain.

Airbus shares rose 1% in a slightly weaker market.

Scherer, who is currently chief commercial officer and former head of planemaking strategy, said he would devote himself and his team to "meet our operational objectives...and prepare the future of our products and services".

Airbus has said it plans to deliver 720 jets this year and raise benchmark single-aisle jet output by about 50% to 75 planes a month by 2026. The company is wrestling with supply chain problems but has sped up deliveries since the summer.

The shake-up leaves room for some renewal of operational leadership amid approaching retirements, sources said.

'NOT EADS'

Airbus formally merged with its dominant planemaking business in 2018, meaning it combines two separate headquarters and operational functions under one CEO, with the Helicopters and Defence & Space divisions sitting underneath.

The shake-up brings back a separate planemaking CEO under the same roof but the company does not appear to be re-creating two entities, something that had created a stage for chronic in-fighting in the past. Airbus insists that era is over.

Asked whether Commercial Aircraft would report profit separately, a spokesperson said: "We cannot share more details about the 'to-be' structure at this stage and we will be working with our social partners throughout the process."

People familiar with the group's history said the shake-up reflected a cautious compromise between reinstating a separate management and recreating a holding structure reminiscent of former parent EADS, the stage for past share market turbulence.

"Nobody wants to recreate EADS," one of the people said.

Faury said in a statement he and Scherer already worked "hand in hand" and that the existing combination of parent group and planemaking business had allowed "alignment and speed of execution during a period of multiple crises and change".

Scherer's immediate priorities will include tackling a production and quality crisis at engine maker Pratt & Whitney, while longer-term product decisions are in store in coming years for an A220 upgrade and eventual A320 successor.

His place at the head of the sales operation is likely to be taken by contracts head Benoit de Saint-Exupery, insiders said.

Although Faury is widely expected to remain a somewhat hands-on CEO, Jefferies analyst Chloe Lemarie said several topics would benefit from the split of his two roles including supply chains and the Franco-German FCAS/SCAF fighter programme.

(Reporting by Tim HepherEditing by Mark Potter and Ros Russell)