In response to the war in Ukraine, Canada became the first Western government to ban the supply of titanium, a strategic metal used in aerospace manufacturing. This move raised concerns about potential impacts on Airbus’s operations, as VSMPO-AVISMA, the industry’s largest titanium supplier, is based in Russia. However, Canada has granted Airbus a waiver to use Russian titanium in its Canadian plants, providing flexibility and mitigating concerns about disruptions to its core operations. The waiver is expected to prevent potential issues with the import of European-built long-range jets that rely heavily on titanium. Airbus had argued that banning titanium imports would have a negative impact on the economy with limited impact on Russia. Despite this, Canada took the unprecedented step of including VSMPO-AVISMA in its sanctions list in February. Industry experts indicate that titanium is primarily utilized in large lightweight airliners, such as the Airbus A350 or Boeing 787, rather than smaller models like the Airbus A220, which is partially assembled in Canada. Nonetheless, the restrictions have prompted concerns among suppliers, as they could potentially hinder the import of foreign-built jets containing Russian titanium into Canada without an exemption. Airbus had sought an exemption from the Canadian government to address such concerns. The impact of Canada’s stance has also spread to the United States, where supplier RTX announced a $175 million charge related to replacing Russian-owned entities from which it sourced titanium for its Canadian operations. Ottawa’s position is expected to intensify the debate over the potential for further sanctions targeting Russia’s economy. Ukraine has repeatedly urged Western governments to impose stricter economic sanctions, and Canada has taken a particularly strong stance against Russia since the start of the conflict in 2022. While Airbus maintains that titanium represents a small portion of Russia’s exports, it emphasizes that abruptly cutting off supplies would significantly damage Western aerospace. The debate intensified after Canada’s sanctions guidance raised concerns about the impact. A source familiar with Canada’s policy highlights the importance of avoiding self-inflicted harm through excessive sanctions. William Pellerin, a trade lawyer in Canada, points out the potential risks for Canadian carriers purchasing foreign-built jets containing Russian titanium. Airbus has pledged to expedite plans to diversify its supply chain. Meanwhile, Boeing has suspended titanium purchases from Russia while maintaining a substantial inventory due to diversification efforts initiated several years ago.
Canada Grants Airbus Flexibility in Russian Titanium Usage
