New Safran CEO Faces Altered Landscape
French aerospace manufacturer Safran has started 2021 under new leadership in the guise of Olivier Andries, who replaces former chief executive officer Philippe Petitcolin.
Andries takes the reins during a period of unprecedented challenges for Safran, notably Covid-19-induced pressure on aftermarket demand for CFM56 engines and the reintroduction the CFM LEAP-powered Boeing 737 Max.
That said, he is well versed for the role given his previous employment as CEO of Safran Aircraft Engines – one half of the CFM joint venture – where he oversaw the transition from the CFM56 to the LEAP and the ramp up in production of the latter.
The latest available data shows that within Safran’s propulsion division, revenue from deliveries of engines was down 42% for the first nine months of 2020, as compared with the prior-year period, while services revenue was down 33%, mainly due to a falling spare parts sales.
Overall propulsion revenues fell 37% in the first nine months, less than in most other parts of Safran’s business excepts for aircraft interiors which fell 42% due to the collapse in new aircraft deliveries and much lower demand for retrofitted cabin solutions.
However, interiors are a smaller part of Safran’s overall business than propulsion, which accounts for about half its sales.
Within propulsion, Safran believes aftermarket revenues will recover quicker than original equipment due to a prolonged depression of new aircraft demand, while maintenance can only be avoided for so long.
In the meantime, Andries’ focus will be on costs and lowering the group’s breakeven point, but looking further ahead he will have some interesting decisions to make on future propulsion technologies.
In particular, the Franco-U.S. alliance of CFM may at some point have to decide between tacking towards Airbus goal of a liquid-hydrogen-powered aircraft – or whatever future engine technology Boeing prefers.