Engine Shortage Delays Airbus Production Increase

Engine maker CFM's reluctance to significantly increase supplies to Airbus at a time of stress for its other key customer Boeing was likely a factor in Airbus' move to delay planned jet output increases, industry sources said on Tuesday. On Monday, Airbus delayed a multi-year hike in narrowbody production and cut profit targets, citing supply chain issues. The European planemaker announced it intends to deliver around 770 commercial jets this year, down from 800. It also curbed plans to increase production of the A320neo family, pushing back a target to raise output from 50 to 75 a month by 2026 to 2027.

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CFM, a transatlantic venture of GE Aerospace and France's Safran, makes LEAP engines that power all Boeing 737 MAX jets and typically just over half of the competing Airbus A320neo family, where they compete with the Geared Turbofan of RTX subsidiary Pratt & Whitney. Negotiations to secure the necessary number of engines for 2025 to keep the previous targets on track hit a snag after Airbus asked CFM to increase its share of narrowbody deliveries to compensate for industrial woes at Pratt, the sources said.

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Airbus was hoping CFM would hike its share of Airbus production to the equivalent of around 75% of A320neo deliveries from about 60% now, two people familiar with the matter said. CFM's market share depends on a triangle of factors: Airbus's production rate, Boeing's production rate and the contribution of CFM's rival Pratt & Whitney to Airbus output. CFM makes up 65% of Airbus's A320neo-family order backlog in cases where airlines have made an engine choice and accounted for 50% of Airbus narrowbody deliveries in 2023, according to Rob Morris, global head of consultancy at Cirium Ascend.

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Safran's chairman pointedly reminded an audience including French Finance Minister Bruno Le Maire and senior Boeing executives of the importance of Boeing to CFM and French aerospace in an anniversary ceremony in early June. Speaking in the gilded state rooms of France's former naval ministry, Ross McInnes said: "We have stood staunchly behind Airbus and Boeing through both their respective ups and downs, and indeed the ups and downs of transatlantic relations." The situation highlights the delicate balance engine makers must strike between supporting their key customers while managing their own production and supply chain challenges.

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