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US supplier Howmet under spotlight over Airbus engine delays
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US supplier Howmet under spotlight over Airbus engine delays
Jul 31, 2024 3:25 AM

PARIS, July 31 (Reuters) - French jet engine maker

Safran on Wednesday named U.S. contractor Howmet

Aerospace ( HWM ) as the supplier of parts at the centre of

industrial issues that led to a slowdown of engine production

and curtailed deliveries of Airbus jets.

The comments by Safran CEO Olivier Andries cast an unusual

spotlight on recent supply problems in aerospace but appeared

intended to clear the air following weeks of speculation over

the cause of an abrupt slowdown in LEAP engine deliveries.

Howmet could not immediately be reached for comment outside

U.S. business hours.

Airbus last month reduced its delivery targets for 2024 and

slowed its production ramp-up, after what it described as delays

in deliveries of LEAP engines built by Safran and GE Aerospace

venture CFM, as well as other components like landing gear.

Asked to explain the shortfall, Andries told reporters and

analysts in separate calls that it resulted from a sharp drop in

the production yield - or proportion of usable parts - for

high-pressure turbine blades.

On a media call coinciding with the group's half-yearly

earnings, he named the supplier of the blades which are a key

component of the inner core or hot section of the engine.

"The supplier's yields dropped sharply and in a surprising

way; the supplier is Howmet," Andries said, adding that the

situation had partially recovered in recent weeks.

The tone of the remarks appeared to strike a contrast with

comments a day earlier by Howmet CEO John Plant.

He told analysts that production of turbine blades for the

engines' hot section had increased significantly and added: "And

therefore it's unlikely that we are providing such constraints".

Shares in Howmet rose 13% on Tuesday after the

Pennsylvania-based company lifted annual forecasts, driven by

strong demand for engine products and fastening systems.

AIRBUS 'BLIND-SIDED'

Safran and GE Aerospace jointly own CFM International, the

world's largest jet engine maker by volume, whose LEAP engines

power all Boeing 737s and about half of the competing

Airbus A320 family.

Airbus last month cut aircraft delivery forecasts and slowed

its production ramp-up after problems with supplies of LEAP

engines and other components, such as landing gear.

On Tuesday, Airbus CEO Guillaume Faury said it had been

"blind-sided" by the shortfall in deliveries of LEAP engines,

which come on top of a broader history of industrial problems

affecting competing Pratt & Whitney engines.

Andries' comments referred to the quality of parts rather

than quantity. Experts say production yield is the proportion of

parts that meet rigorous inspection thresholds in aerospace.

The high-pressure turbine blades are a critical part of the

hot inner section of the LEAP engine for which GE Aerospace is

responsible under the share of work in the French-U.S. CFM

engine partnership, which turns 50 this year.

Last week GE Aerospace said it had made progress with a

number of suppliers but that new engine output, which fell 20%

in the second quarter from the previous quarter, had not

recovered in May as hoped. It reiterated that the supply of

materials was a key constraint.

GE could not immediately be reached for comment on Andries'

remarks concerning the production of LEAP high-pressure turbine

blades, for which Howmet is the sole supplier.

The shortfall in LEAP engine deliveries in the second

quarter leaves CFM facing a sharp increase in output in the

second half. Andries said CFM had reached agreement in principle

with Airbus over volumes to be supplied in 2025.

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