Commercial Demand Boosts Safran

French OEM Safran posted an operating profit of €1.3bn ($1.4bn) for the first half of 2016, buoyed by the performance of its commercial engine and equipment activities.

In the six months from January to the end of June, the French company saw overall revenues up 6.3 per cent to €8.9bn ($9.9bn) while adjusted net profit declined 25 per cent to €862m ($965m). However, its commercial division performed strongly, with the order backlog for Boeing and Airbus aircraft seeing deliveries for CFM56 Family engines rise 8.6 per cent year-on-year to a record 886 in H1 2016.

Global demand also had a positive effect on aircraft equipment sales of items such as wiring shipsets and landing gears on aircraft such as the A350 and the 787. Components including thrust reversers and nacelle deliveries for the A320ceo and A320neo respectively also saw healthy increases.

Safran’s services division was one of its star performers, with revenue growing by 14.9 per cent for equipment such as carbon brakes, landing gear and nacelles, while operating profit surged by 36.2 per cent year-on-year.

“Production rates of equipment and engines for current-generation aircraft have never been higher,” said Safran CEO Philippe Petitcolin in a statement released last week.

Safran said it was aided by reduced R&D costs associated on programmes such as its LEAP engine, which it manufactures through its CFM International joint venture with GE Aviation. It will surely hope for further financial benefits in the second part of the year as more of the engine types begin operating, following the delivery of the first LEAP 1-A variant powering the A320neo to Turkey’s Pegasus Airlines last month

However, while lowered R&D costs will bring an undoubted relief, other challenges associated with an engine’s entry-into-service are sure to arise.

But a bullish Petitcolin said the Paris-headquartered firm is ready for such challenges. “In the coming months, the challenge of the LEAP ramp up will intensify,” he said. “The team at Safran is fully mobilised to continue executing on our objectives.”

If new generation engines such as the LEAP can match up to its CFM56 stalwart in terms of sales, then the next few years could prove highly lucrative ones for Safran.  


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