By Tim Hepher
PARIS (Reuters) -Europe's Airbus kickstarted a surprise leadership transition in its biggest business on Wednesday, with the chief of German engine-maker MTU Aero Engines (OTC:MTUAY) tapped to replace Christian Scherer as head of planemaking from 2026.
It is the second time in just over a year that the world's largest planemaker has announced jetmaking management changes but CEO Guillaume Faury denied the move was connected to recent industrial performance as Airbus upheld delivery targets.
Airbus has been planning succession after a history of management upheaval. But industry sources told Reuters Airbus' hand had in part been forced by MTU's insistence that its CEO, Lars Wagner, decide his future.
MTU could not be reached for comment. It said in a statement that Wagner had informed its board earlier on Wednesday that he would not renew his contract when it expires on Dec. 31, 2025.
Faury said the succession plan would give time to provide a smooth transition though the handover's timing was left unclear, with MTU saying Wagner would serve his full term.
"I consider Lars Wagner one of the strongest executives in the industry," Faury said in a call with journalists, adding that he continued to work efficiently with Scherer to secure the company's production ramp-up in a difficult environment.
A career-long Airbus insider and well-known former head of planemaking strategy, Scherer stepped up from the top sales job to become head of the commercial division in January.
The 62-year-old industry veteran had not been expected to have a long stint in the role given that he is approaching retirement age, but analysts said the announcement of a successor came sooner than expected.
Agency Partners analyst Sash Tusa said slow progress towards achieving delivery targets might have weighed on the decision.
Scherer recently singled out engine-maker CFM International, co-owned by GE Aerospace and Safran (EPA:SAF), as a "bottleneck" in Airbus production.
Airbus said its board had also decided to propose a third term for Faury when his own mandate expires in 2025.
PROFIT BEAT
Wagner is a former Airbus industrial manager who has held several positions at MTU during a turbulent period dominated by a crisis over production and availability of new Geared Turbofan engines made for Airbus by Pratt & Whitney in a partnership that includes MTU.
Tusa said Wagner could take a tougher stance at Airbus towards Pratt & Whitney following tensions between the engine partners.
The management announcements came as Airbus said its widely-watched adjusted operating profit rose 39% to a stronger than expected 1.407 billion euros ($1.53 billion) in the quarter. Revenue rose 5% to 15.689 billion euros.
Faury said Airbus was closely monitoring the potential for trade tensions as Republican U.S. presidential candidate Donald Trump has proposed sweeping tariffs on imports.
Airbus took no new charges for its satellites business after 1.5 billion euros of charges in recent quarters but it has indicated that more could follow as it digs further into losses in satellites, particularly for its troubled OneSat project.
Airbus said it was managing a specific supply-chain problem that could affect the ramp-up trajectory for the A350 in 2025.
Reuters reported this month that Airbus was facing concerns over supplies from Spirit AeroSystems (NYSE:SPR), raising the prospect of delays in deliveries including the A350 next year.
Faury said Spirit Aero remained a "pacing element," an industry term meaning its performance has a decisive impact on whether the final airliner product is delivered on time.
Airbus announced earlier it had delivered the first long-range single-aisle A321XLR jet to Spain's Iberia and secured an order for 60 jets from Saudi startup Riyadh Air.
($1 = 0.9205 euros)