Safran in major engine repair capacity expansion as demand soars

Safran announces 1 bln euro investment in engine repair network · Reuters

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By Tim Hepher

BRUSSELS (Reuters) -French jet engine maker Safran set out plans on Tuesday to invest more than 1 billion euros ($1.1 billion) and hire 4,000 people worldwide to "radically scale up" its maintenance network as the aviation industry tackles congested repair shops.

The plan follows strong demand for LEAP jet engines that Safran co-produces for Airbus and Boeing with GE Aerospace and is expected to boost Safran's share of the aftermarket, where engine makers make much of their income.

Safran and GE Aerospace produce the engines through co-owned venture CFM International, the world's largest engine maker by number of units sold, which is celebrating its 50th anniversary.

Engine maintenance has become a major industry headache as efforts to boost fuel efficiency increased the wear and tear on engines in certain climates and engine makers struggled to bring on new capacity fast enough to keep pace with a boom in demand.

Analysts say that has meant longer waiting times at repair shops, exacerbating aircraft shortages and putting pressure on engine makers to accelerate their capacity expansion plans.

Jean-Paul Alary, president of Safran Aircraft Engines, said Safran aimed to quadruple its in-house capacity to 1,200 shop visits per year by 2028. "It's a sprint," he told reporters.

Safran unveiled its strategy at a recently inaugurated engine service centre outside Brussels, the first of six new or expanded sites due to add capacity by 2026.

As part of the expansion, French President Emmanuel Macron signed an agreement expanding Safran's presence in Casablanca during a visit to Morocco late on Monday, one of a number of business deals boosting ties following diplomatic tensions.

CFM's LEAP engines exclusively power the Boeing 737 series and are available as a choice on the Airbus A320neo in competition with Pratt & Whitney's Geared Turbofan.

'QUICK TURN'

Jet engines are typically sold for little or no profit at the outset, or even at a loss, with manufacturers making most of their profit in services spread over the life of the engine.

The LEAP engine, introduced in 2016, has only just started to generate major overhauls that take place every 6-8 years.

But Safran's Brussels plant is busy handling "quick turn" visits to address the harsh climate issues, ahead of the upgrade of a key engine component designed to improve durability.

CFM competes for maintenance contracts with airlines and a network of 14 independent repair shops including five key players.