June 8, 2017 / 9:20 PM / 3 months ago

Airbus CEO worried by Qatar crisis, risk of hard Brexit

FILE PHOTO: A Qatar Airways Airbus A350 XWB aircraft is displayed at the Singapore Airshow at Changi Exhibition Center February 18, 2016. REUTERS/Edgar Su/File Photo

TOULOUSE, France (Reuters) - The head of Airbus expressed worries about growing geopolitical uncertainties on Thursday, calling the rift between key customer Qatar and its Gulf neighbors troubling and warning of the impact of a “hard Brexit” on the planemaker’s UK operations.

“Any disruption in any mature region or market that is relevant for us is a reason for concern,” Chief Executive Tom Enders told reporters.

Referring to the aviation blockade against Qatar imposed by Saudi Arabia and others this week, Enders said: “That’s a development that is troubling for our industry, for many industries. We sincerely hope that these disruptions are not developing to a long-term conflict.”

The bust-up between Arab powers has dealt a blow to Gulf carriers already hurt by low oil prices and laptop bans and exposed the sensitivity of Gulf hubs to regional uncertainty, delegates at an airlines meeting said this week..

Analysts say any prolonged disruption could prompt Qatar to delay taking aircraft deliveries from Airbus and Boeing.

Speaking at a media briefing ahead of the June 19-25 Paris Airshow, Enders played down suggestions that Airbus, the world’s second-largest planemaker behind Boeing (BA.N), was too reliant on the Middle East.

“We are far from being over exposed… to this region,” he said, noting it made up 13 percent of unfilled orders.

“I think this region will remain important and relevant even allowing for some recouping, some consolidation; nobody can exclude that for the long term.”

With talks looming on Britain’s decision to leave the European Union, Enders said Airbus’s UK plants were among its most competitive and warned against crimping this advantage through restrictions on people or goods.

“We are a company that is obviously very interested in the free flow of people. The mobility between our sites in Europe is crucially important,” he said.

“Any tariff barriers could also potentially impact the competitiveness of our activities in Britain.”

Enders was speaking shortly before a shock exit poll suggested that UK Prime Minister Theresa May had failed to maintain an overall majority after calling an election to strengthen her Conservative government’s position ahead of EU negotiations.

Several companies have expressed concerns over a so-called ‘hard Brexit’ under which trade tariffs could apply.

Enders said “any British government paying attention to the importance of the aerospace industry is well aware of what is at stake”.

Analysts say Airbus is expected to press UK governments for continued support for the aerospace industry as the price for maintaining the same level of UK investment for future aircraft programs.

Reporting by Tim Hepher, Cyril Altmeyer; Editing by Dan Grebler

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