US supplier Howmet under spotlight over Airbus engine delays
Rewrites, adds Safran CEO quote in paragraph 6, context
By Tim Hepher
PARIS, July 31 (Reuters) -French jet engine maker Safran SAF.PA on Wednesday named U.S. contractor Howmet Aerospace HWM.N 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 BA.N 737s and about half of the competing Airbus AIR.PA 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 RTX.N 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.
Reporting by Tim Hepher; Editing by Louise Heavens, Clarence Fernandez, Alexandra Hudson
Asset collegati
Ultime news
Disclaimer: le entità di XM Group forniscono servizi di sola esecuzione e accesso al nostro servizio di trading online, che permette all'individuo di visualizzare e/o utilizzare i contenuti disponibili sul sito o attraverso di esso; non ha il proposito di modificare o espandere le proprie funzioni, né le modifica o espande. L'accesso e l'utilizzo sono sempre soggetti a: (i) Termini e condizioni; (ii) Avvertenza sui rischi e (iii) Disclaimer completo. Tali contenuti sono perciò forniti a scopo puramente informativo. Nello specifico, ti preghiamo di considerare che i contenuti del nostro servizio di trading online non rappresentano un sollecito né un'offerta ad operare sui mercati finanziari. Il trading su qualsiasi mercato finanziario comporta un notevole livello di rischio per il tuo capitale.
Tutto il materiale pubblicato sul nostro servizio di trading online è unicamente a scopo educativo e informativo, e non contiene (e non dovrebbe essere considerato come contenente) consigli e raccomandazioni di carattere finanziario, di trading o fiscale, né informazioni riguardanti i nostri prezzi di trading, offerte o solleciti riguardanti transazioni che possano coinvolgere strumenti finanziari, oppure promozioni finanziarie da te non richieste.
Tutti i contenuti di terze parti, oltre ai contenuti offerti da XM, siano essi opinioni, news, ricerca, analisi, prezzi, altre informazioni o link a siti di terzi presenti su questo sito, sono forniti "così com'è", e vanno considerati come commenti generali sui mercati; per questo motivo, non possono essere visti come consigli di investimento. Dato che tutti i contenuti sono intesi come ricerche di investimento, devi considerare e accettare che non sono stati preparati né creati seguendo i requisiti normativi pensati per promuovere l'indipendenza delle ricerche di investimento; per questo motivo, questi contenuti devono essere considerati come comunicazioni di marketing in base alle leggi e normative vigenti. Assicurati di avere letto e compreso pienamente la nostra Notifica sulla ricerca di investimento non indipendente e la nostra Informativa sul rischio riguardante le informazioni sopra citate; tali documenti sono consultabili qui.