Engine maker's Boeing issue may impact Airbus output forecast

The challenges faced by an engine manufacturer related to Boeing are expected to have repercussions on Airbus's projected output levels.

Boston Brand Media brings you the latest news - According to industry sources on Tuesday, CFM's cautious approach in increasing supplies to Airbus, amid ongoing challenges with Boeing, likely influenced Airbus's decision to postpone scheduled increases in aircraft production. This delay, announced Monday, includes a multi-year plan to raise narrowbody production, alongside reduced profit forecasts and a scaled-back 2024 delivery goal due to shortages of engines and components. The news caused a decline in shares of Europe's largest aerospace company on Tuesday.

CFM, jointly owned by GE Aerospace (GE.N) and France's Safran (SAF.PA), manufactures LEAP engines used in Boeing 737 MAX aircraft and a majority of Airbus A320neo jets, competing with RTX subsidiary Pratt & Whitney's Geared Turbofan engines. Airbus is striving to boost production swiftly to meet high demand, although some suppliers remain skeptical about its production targets.

Negotiations to maintain 2025 production targets faced difficulties when Airbus requested CFM to increase its contribution of narrowbody engines due to issues at Pratt & Whitney. Sources indicated Airbus aimed for CFM to raise its share of A320neo deliveries to about 75%, up from the current approximately 60%.

The increase in Airbus's request for CFM engine deliveries comes amid a decline in current-quarter shipments and stable performance in the preceding three months, according to industry sources. Airbus has emphasized additional shortages, including cabin components. However, this request also places the world's largest engine maker in a challenging strategic position as it approaches its 50th anniversary, potentially exacerbating issues with its other major customer, Boeing.

Boston Brand Media also found that CFM's market dynamics hinge on Airbus's production rate, Boeing's production rate, and the influence of CFM's competitor, Pratt & Whitney, on Airbus's output. Pre-pandemic, these factors were balanced, with CFM's share of Airbus deliveries gradually increasing due to issues at Pratt & Whitney. Now, with Boeing facing ongoing challenges and Pratt & Whitney struggling with bottlenecks, CFM is under pressure to increase production. However, CFM aims to maintain a balanced approach, not wanting to disadvantage its primary partner, Boeing, despite Airbus's urgent demand.

Founded in 1974, CFM was established by Gerhard Neumann, a German-born fighter engineer who served the Allies, and Rene Ravaud, a French resistance hero injured during World War II. Despite its low public profile, CFM has navigated significant industry challenges, including trade disputes between its major clients, Airbus and Boeing, and complex transatlantic relations. At a recent anniversary event, Safran's chairman emphasized CFM's pivotal role in both aerospace giants' successes, underscoring its commitment amid current production uncertainties affecting Airbus.

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Source: Reuters‍