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Safran CEO says supply chain will drive jet output hike

Published 17/02/2023, 13:27
Updated 17/02/2023, 13:38
© Reuters. FILE PHOTO: The logo of Safran is seen outside the company's headquarters in Issy-les-Moulineaux near Paris, France, January 2, 2019. REUTERS/Gonzalo Fuentes/

© Reuters. FILE PHOTO: The logo of Safran is seen outside the company's headquarters in Issy-les-Moulineaux near Paris, France, January 2, 2019. REUTERS/Gonzalo Fuentes/

PARIS (Reuters) - French jet engine maker Safran (EPA:SAF) on Friday backed plans by Airbus to raise its core single-aisle production above 65 jets a month, but warned that fragile global supply chains would determine whether planemakers were able to hit targets.

The company, which is General Electric (NYSE:GE)'s joint partner in the world's biggest engine maker by number of units, CFM International, has been sceptical in the past about plans by Airbus for a sharp increase in output to meet rebounding travel demand.

Safran has embraced plans to lift output of A320neo single-aisle jets to 65 a month from about 45 a month now but held back from committing engine volumes for a further sprint to 75 a month.

Chief Executive Olivier Andries said on Friday, however, that a record order for Airbus and Boeing (NYSE:BA) airplanes from Air India this week and other signs of rising demand demonstrated the case for higher output.

But he stopped short of endorsing Airbus' calls to go as high as 75, which have been questioned by some other suppliers and lessors. CFM competes with Pratt & Whitney to power the A320neo and is the sole engine maker for the Boeing 737 MAX.

"Demand is clearly very strong, which is confirmed by the recent Air India announcement, and it supports an increase in production above the 65 a month that was being envisaged before the crisis," Andries said in comments emailed to Reuters.

"The pace of this rate increase will in reality be determined by the capacity of suppliers to follow," he added.

© Reuters. FILE PHOTO: The logo of Safran is seen outside the company's headquarters in Issy-les-Moulineaux near Paris, France, January 2, 2019. REUTERS/Gonzalo Fuentes/

"We have an agreement with our (planemaking) clients on the volumes to supply in 2023 and 2024 and our absolute priority is to respect these commitments," he added.

Under a shallower production plan announced on Thursday following supply disruption, Airbus aims to reach production of 65 a month by the end of 2024 and to hit 75 a month in 2026.

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