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.