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Airbus urges European leaders to refrain from Russian titanium sanctions

Airbus urges European leaders to refrain from Russian titanium sanctions

The Airbus logo is posted at the Airbus facility in Monttoir de Brittany near Saint-Nazaire, France, March 4, 2022. REUTERS/Stefan Mahe/File Photo

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(Reuters) – Airbus urged Europe on Tuesday not to block the import of titanium from Russia, saying sanctions on the strategic metal would harm aviation while hurting the Russian economy.

Chief Executive Guillaume Faury said at the annual shareholder meeting that extending measures taken after the Russian invasion of Ukraine to include titanium used in aircraft and jet engines “would not be appropriate.”

Ukrainian President Volodymyr Zelensky has repeatedly called on Western governments to impose stronger economic sanctions on Russia.

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The European Union said on Monday that more sanctions were on the table, and British Prime Minister Boris Johnson said on Saturday that Kyiv’s allies would continue to put pressure on Moscow.

Russia is the largest producer of titanium, a strategic metal valued for its strength relative to its weight.

The European Union has so far avoided banning Russian goods other than steel and coal, and titanium remains exempt from restrictions on trade with Russia.

“Airbus is advancing and will continue to fully enforce the sanctions,” a spokesman said.

The spokesman added: “Sanctions on Russian titanium will not harm Russia because it represents only a small part of the export earnings there. But it will cause serious damage to the aviation industry throughout Europe.”

Faury said that Airbus is accelerating the search for non-Russian supplies in the long term, while its needs are covered in the short and medium term.

In March, Airbus said it was “obtaining titanium directly from Russia as well as from other countries” and indirectly acquiring Russian titanium through suppliers.

She reiterated this on Tuesday in response to a Reuters inquiry but declined to say when she last received Russian titanium.

OUTLOOK CONFIRMED

Airbus said it relies on Russia for half of its titanium needs, while state-backed VSMPO-AVISMA provided a third of Boeing’s needs under a renewed agreement last November. Boeing said last month it had suspended purchases of Russian titanium.

Rostec owns 25% of the state defense group VSMPO-AVISMA. It relies on aviation for three-quarters of its sales.

Aerospace officials say Airbus is partly concerned about relying on Russia for suppliers such as France’s Safran, which uses titanium to make aircraft engine parts and landing gear.

Safran said in February it had several months of reserves and relied on Russia for less than half of its needs. It did not immediately respond to a request for comment on whether it shared Airbus’ concerns about possible sanctions. Read more

Aerospace is not the only industry grappling with Russia’s commodity influence. Reuters reported last month that US facilities had pressured the White House not to ban Russian uranium. Read more

More than 400 companies have withdrawn from Russia since the war began on February 24, according to researchers. About 80 people maintained their presence, with new investments on hold. Read more

Faury reiterated Airbus’s profit guidance for 2022 but said it was clear that the war in Ukraine “is making it more difficult because we now have a more difficult risk profile” because of the economic risks.

“However, we still have three quarters left, and we still believe we can make it happen,” he said.

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Tim Heaver reports. Additional reporting by Josephine Mason, Francesco Guaracchio and Imran Abukar. Editing by David Goodman and Jason Neely

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