Airbus has spent €15 million preparing the company for the possibility that the UK could exit the European Union without a post-withdrawal agreement in place.

The airframer’s UK senior vice-president, Katherine Bennett, disclosed the figure during an appearance before a cross-party parliamentary industrial strategy committee on 28 November.

She told the committee that the company had to “prepare for the worst”, adding that it had twice written to its suppliers over the past year explaining its preparations for a “no-deal” scenario.

Bennett added that Airbus had encouraged all suppliers needing European Aviation Safety Agency certification to apply for third-party status.

But she stressed that Airbus was encouraged by the greater certainty created by the provisional UK-EU withdrawal agreement. The agreement has yet to be approved by the UK parliament, and faces the strong possibility of being rejected.

Bennett said that Airbus had entered a “holding pattern” and had suspended any significant new investment in the UK while the uncertainty over ‘Brexit’ persisted.

“If the withdrawal agreement is successful Airbus would consider continuing to invest, as the company has done over many years,” she said. Bennett declined to quantify the investment which had been put on hold.

She described the draft agreement as a “welcome first step”, adding: “Our concerns were about certainty and lack of clarity.

“We can see a lot of benefits in the agreement, but we’re still looking at it in more detail. Some of the customs issues are quite complicated.”

Bennett emphasised that Airbus is “not happy with Brexit at all” and reiterated the company’s position, outlined in a risk assessment earlier this year, that a “chaotic” withdrawal, without an agreement, would lead the company to reconsider future investment in the UK.

“We want the lightest touch in terms of checks at customs,” she told the committee. “We want the dial to be as low as possible in terms of any extra burdens.”

Airbus has a “huge task force” examining the customs situation, said Bennett, pointing out that the company was ramping up its wing production for single-aisle aircraft.

“We’re concerned that, if there’s disruption at the borders, it will potentially cause an impact on our being able to deliver the wings, to go to our final assembly, then deliver to airlines,” she said.

Bennett revealed that Airbus had spent €15 million on “no deal” preparations, such as warehousing to stockpile parts, adding: “I’d much rather that money had been spent on research and technology, or more skills.”

She also told the committee that Airbus was serious about reviewing UK investment, and the possibility of moving production elsewhere – even if it was “not going to move overnight”.

“No-deal Brexit is absolutely what we don’t want,” she added, stating that the withdrawal agreement negotiated, while “not a perfect deal”, was “much better than no deal” – and that prolonging uncertainty would lead to more business investment decisions, in general, going against the UK.

Source: Cirium Dashboard