Safran CEO Calls for Realistic Targets Amid Supply Chain Challenges in Aviation Industry

Olivier Andries, the CEO of Safran, a French jet engine manufacturer, has stated that global supply chains are still reeling from a series of external shocks. He cautioned against setting unattainable industrial goals as the aviation industry grapples with increasing travel demand. Safran and GE jointly produce LEAP jet engines for all Boeing and over half of Airbus's narrow-body jets through their CFM International partnership.


Andries noted that the supply chain is still recovering from the impacts of the pandemic, the Ukraine crisis, energy issues, inflation, and labor shortages. He emphasized that the supply chain has yet to return to normal levels. The key question, according to Andries, is determining the appropriate speed for ramping up production, as the demand is already present. Due to supply chain issues, CFM recently reduced its growth forecast for LEAP deliveries in 2023 from around 50% to 40-45%, implying deliveries of approximately 1,600 to 1,650 units. Andries reaffirmed a preliminary target of 2,000 LEAP engine deliveries in 2024, pending final discussions with GE before the annual forecasts in February. However, he indicated that this is the maximum achievable target given the ongoing pressure on resources such as raw materials.


For 2025, Andries stated that CFM plans to increase LEAP deliveries, but there is no immediate need to agree on exact volumes with aircraft manufacturers until mid-next year. He stressed the importance of being ambitious yet realistic in a challenging supply chain situation and warned against making unachievable commitments. Engine manufacturers have generally been more conservative than Airbus in particular in increasing output to meet new travel demand. Aircraft manufacturers have identified engine supplies as one of their biggest risks. Andries reiterated that CFM is prepared to return to pre-pandemic output levels: 50 twin-engine narrow-body jets a month at Boeing or 65 at Airbus. However, he warned that aircraft manufacturers have recently shown a tendency to reduce their demand over time.

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Andries also pointed out that Airbus has delayed its target of 75 a month from 2025 to 2026. Despite missing targets in 2022, Airbus has stated that it is on track to reach this goal. Andries revealed that CFM continues to base its assumptions on a market share of 60% at Airbus, where it competes with Pratt & Whitney, and 100% at Boeing, where it is the sole supplier for the 737. Andries declined to provide a numerical estimate for 2025, but his production and market share estimates suggest deliveries of approximately 2,200-2,300 engines, after accounting for spare output and a few dozen deliveries for the new Chinese Comac C919 jet. These comments were made as Safran announced a new agreement with the Moroccan government to develop local supply chains, with a focus on training. Safran repairs engines manufactures engine nacelles and operates a cabling joint venture with Boeing - Matis Aerospace - in Morocco.

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