Safran urges realistic aero output plans as supply remains tight

© Reuters. A view shows a Safran logo at the Safran Aircraft Engines plant in Gennevilliers, France, February 6, 2019. REUTERS/Benoit Tessier/File Photo

By Tim Hepher

CASABLANCA, Morocco (Reuters) – The head of French jet engine maker Safran (EPA:) said global supply chains are still struggling to shake off a series of external shocks and warned against setting unrealistic industrial targets as aviation tackles rising travel demand.

Together with GE, Safran co-produces LEAP jet engines for all Boeing (NYSE:) and more than half of Airbus narrow-body jets through their CFM International venture.

“The supply chain is still struggling to recover from the shock of the pandemic, as well as the other shocks: Ukraine, energy, inflation and labour,” Andries said during a visit to Morocco to sign a government pact on boosting supply chains.

Citing supply issues, CFM recently trimmed a percentage growth forecast for LEAP deliveries in 2023 to 40-45% from around 50%, implying deliveries of around 1,600 to 1,650 units.

Andries reiterated a preliminary target of 2,000 LEAP engine deliveries in 2024, subject to final discussions with GE ahead of annual results announcements in February.

He indicated, however, that this represented a ceiling as pressure remained on items including raw materials.

“It is already very ambitious given the state of the supply chain today and for me to tell you today that we can do 2,100 or 2,200 in 2024 – no. So we are targeting 2,000.”

For 2025, Andries said CFM would raise LEAP deliveries but that there was no urgency to agree precise volumes with aircraft manufacturers until around the middle of next year.

“Everyone is very conscious that in a difficult supply chain situation, we all have to be ambitious for sure, but also challenge ourselves and remain realistic,” Andries said. “There is no point in making commitments you can’t achieve.”

Engine makers have been generally more cautious than Airbus, in particular, about raising output to meet new travel demand.


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