But what happens when one party decides to bail on the arrangement? That’s what Russia did to Airbus when it turned over the next decade’s worth of plane manufacturing to state-owned Rostec. Yet Airbus doesn’t seem to have noticed. The company has yet to publicly address whether the loss of potentially billions of dollars will cause it to finally stop standing in the way of sanctions on Russian titanium.
A Lonely Stance, and Poorly Rewarded
For months, Airbus has stood virtually alone among major Western international corporations. Instead of supporting sanctions on titanium, it has been a key player in keeping the world’s money flowing to Russia. Rather than closing its Russian operations, it has continued to directly purchase Russian titanium. And it has done so because, according to Airbus Chief Executive Guillaume Faury, speaking in June, titanium sanctions will harm Europe’s aviation industry and its defense capabilities. As an Airbus spokesman described a couple of months earlier: "Sanctions on Russian titanium would hardly harm Russia, because they only account for a small part of export revenues there. But they would massively damage the entire aerospace industry across Europe."
Airbus may have had legitimate geopolitical and defense reasons for its decisions. Those reasons may have also just been a smokescreen. Consultant AlixPartners told the WSJ that 65% of Airbus’s titanium supply comes from Russia. Nobody really knows, but we do know that Airbus’ prostrations to Russia no longer have justification, because Russia has made it clear it would rather opt for the most difficult approach possible rather than maintain any trade with the West. Even though Airbus won’t support sanctioning Russia, Russia has sanctioned Airbus.
What’s even more baffling is that Airbus gets its Russia-sourced titanium from VSMPO-Avisma PJSC, which is in turn part-owned by Rostec. That company is currently subject to some sanctions due to Rostec head Sergei Chemezov’s closeness to Putin, but VSMPO sales of titanium are not. Despite this close relationship, Chemezov recently declared that he believed Western aircraft manufacturers will “never” deliver planes to Russia again. This is a stunning strategy for Russia, whose aviation industry previously relied heavily on foreign manufacturers for both technology and hardware.
Time for a New Approach
Russia’s decision should cause Airbus to cut ties with the Kremlin. It is clear that access to titanium rests on the whim of Russia’s leaders. How long until Russia decides to redirect its exports to companies based in friendlier states such as Iran, or toward its own state-owned companies? Even without a formal change, Russia’s self-sufficiency drive would necessitate its titanium being redirected to the domestic factories promising to deliver the new planes Russia once procured elsewhere?
What Russia’s decision makes clear is that it is taking a scorched-earth approach to foreign companies as it pursues its nationalistic expansion goals. Airbus has taken Russia’s side on a critical economic issue, but it is ultimately beholden to the same European Union nations that Putin continues to declare as enemies of Russia and Russian interests.
It’s somewhat baffling that Airbus believes it has a long-term future selling Europe and the U.S. planes made of Russian titanium. It’s time for Airbus to join the world in sanctioning Russia.
Born and raised in the Middle East, Sara Scarlett Willson studied politics and international relations at Royal Holloway, University of London. She now works as an investigative journalist, podcaster and author. The views expressed are the author's own.
