Following Boeing’s decision to suspend the production of the 737 MAX, the joint venture composed of Safran and General Electric Aviation should reduce the production rates of the LEAP-1B engine ‒ but not stop it.
Boeing decided to suspend the production of the 737 MAX on December 16, 2019, citing the extension of certification into 2020, the uncertainty about the timing and conditions of return to service and global training approvals.
The planemaker said the production halt would not affect its own workforce, which could be redeployed to other facilities. But the decision is due to impact the suppliers and subcontractors involved in the MAX program, including CFM International, the joint venture between Safran and General Electric that manufactures the LEAP-1B engine powering the airliner.
The two partners are still evaluating the situation, a Safran spokesperson told AeroTime.
However, Philippe Petitcolin, CEO of the French manufacturer, said it intended to keep the production line open, in order to maintain its industrial capacities. To cope with the Boeing 737 MAX suspension, the production output of the LEAP-1B engine could be reduced by as much as 65%.
“I think we should keep a rate of at least 15 planes per month, or 30 engines per month [against 84 engines today],” said Safran CEO Philippe Petitcolin in an interview with Usine Nouvelle. “I think it’s easier to ramp up when you already have a production than to start from scratch,” he explained. Petitcolin remained evasive on the consequences this could have for Safran. Could the drop of production lead to some layoffs? “At this point, it is still too early to tell,” said Safran CEO.
The extent of the production reduction should be decided by Safran and GE before the end of the week.
When presenting its financial results for the first half of 2019, Safran said it expected to see the Boeing 737 MAX situation affect its finances in the second half of the year. It estimated that the decrease of pre-payments for future deliveries would impact free cash flow by €300 million per semester. However, this forecast was “based on an assumption of return to service for Boeing 737 MAX” by the end of 2019.
Read more: Safran reports strong financial results despite 737 MAX impact
The Boeing 737 MAX is exclusively powered by the LEAP-1B engine. The LEAP family is also powering the A320neo family, and should be the engine of the Chinese airliner Comac C919 once it enters service.