Airbus CEO criticises Europe's regulatory costs as it opens new line

By Tim Hepher

TOULOUSE, France, June 15 (Reuters) - The CEO of Airbus on Monday urged France and the European Union to tackle high regulatory costs and weak competitiveness weighing on businesses as the planemaker opened a new assembly line for its best-selling jet.

Guillaume Faury said the A321neo, which has helped propel Airbus ahead of U.S. rival Boeing and set a daunting target for emerging competitor China, was a European success that depended on proper policies as well as technology.

"Whenever I come back from the U.S. or China, I get very irritated with Europe, because we are too slow and not conscious of enormous challenges to our industries," Faury told a ceremony to start a new line to speed up congested narrowbody production.

EUROPE'S LABOUR, ENERGY, REGULATORY COSTS WEIGH ON INDUSTRY

The new line is the second of its kind to open at a vast Toulouse factory once dedicated to the world's largest airliner, the defunct A380 superjumbo, in response to a race to meet a shift in airlines' demand towards smaller, medium-haul jets.

Boeing is also expanding production for its competing 737 MAX as both planemakers re-use semi-deserted wide-body factories to make way for the smaller planes that dominate today's market.

"The cost of labour is very high in France and Europe, the cost of energy in Europe is higher than in the U.S. or China ... and the cost of regulatory barriers is absolutely horrible," Faury said.

The unusually direct political message from one of Europe's largest exporters came as G7 leaders gathered in France to discuss problems including global economic imbalances.

Speaking to an audience of workers and politicians including France's transport minister, Faury said competitiveness should be a topic in next year's French elections.

"We must not do to aviation what we did to the automobile industry ... where everything was fine, and today everything is going badly," Faury, a former car industry executive, said.

Transport Minister Philippe Tabarot said the new facility was a decisive step towards achieving higher production.

'NO CHANGE' ON ENGINE SHORTAGE

Airbus and Boeing are examining technologies for future planes, while insisting the current priority is to deliver on time and stabilise supply chains.

Faury told Reuters there was "no change" regarding shortages of Pratt & Whitney engines that Airbus has partially blamed for pushing back production goals. Several jets could be seen near the factory awaiting engines.

The 490-metre-long line inaugurated on Monday, sitting alongside a similar production bay installed three years ago, completes a set of 10 assembly lines worldwide configured to handle the most profitable Airbus A321neo variant.

Two additional lines in Toulouse that can only handle the smaller A320 will keep producing for an unspecified period.

Airbus also assembles in Germany, the U.S. and China.

After a series of delays, it plans to increase output to 70 to 75 narrowbody jets per month by the end of 2027, up from around 60 now, and stabilise output at 75 a month in 2028.

Recovering from a safety and industrial crisis, Boeing earlier this month said it was studying higher output after The Air Current said it was looking at raising 737 capacity to 70 jets a month. It is currently increasing production towards 47 a month.

(Reporting by Tim Hepher; Editing by Kirsten Donovan, Milla Nissi-Prussak and Joe Bavier)