Safran Eyes Shift To Flight-Hour Maintenance Deals

Safran, which is one half of the CFM International alliance, expects steady aftermarket growth from this year to 2025.

Engine manufacturer Safran has told investors that the focus of its lucrative aftermarket business will evolve from time-and-materials contracts for the CFM56 to rate-per-flight-hour deals for the LEAP engine.

This reflects the fact that more customers for new-generation narrowbodies are signing up to OEM maintenance deals upon choosing an engine, both with CFM and rival Pratt & Whitney.

Safran, which is one half of the CFM alliance, expects its aftermarket revenue from civil engine to grow at a compound annual rate of 15% between 2021-25.

It also predicts that spare parts demand for the CFM56 will return to 2019 levels around 2024, to then plateau from 2025 to 2028.

Aviation Week Network’s Fleet & MRO Forecast has CFM56 maintenance demand rising from $10.3 billion next year to a peak of $13.5 billion in 2025. It then predicts a steady decline to $9.7 billion by 2031. 

Even so, by that point the CFM56 maintenance market will still be worth almost double that of the LEAP, for which Aviation Week predicts $5.5 billion of demand by 2031.

And while Safran expects to service LEAP demand with flight-hour deals, it is as yet unwilling to talk about their profitability. Instead, it is assuming zero margin on flight-hour engine maintenance contracts until 2026, “once sufficient experience has been acquired on the actual cost of LEAP shop visits.”

Nonetheless, the OEM knows it is in a strong position, claiming that the LEAP has 72% of all narrowbody engine orders and commitments. To satisfy this demand, CFM is planning to double LEAP production from 2021 to 2023.

Whether its ramp-up plans will extend to meeting Airbus’s long-term goal of 70+ narrowbody aircraft per month remain to be seen.

Alex Derber

Alex Derber is a UK-based aviation journalist and editor of the Engine Yearbook. He contributes regular features, news and opinion pieces about the…