April 25, 2018 / 5:20 PM / 3 months ago

Safran CEO cautious on further Airbus jet output increases

PARIS (Reuters) - The head of French engine maker Safran (SAF.PA) struck a cautious note on further increases in Airbus jet production on Wednesday, saying he could not commit just yet to expanding the supply of new engines co-produced with General Electric (GE.N).

FILE PHOTO: The logo of Safran Group is seen on the company's headquarters building in Toulouse, Southwestern France, April 18, 2017. REUTERS/Regis Duvignau

Through their CFM joint-venture, Safran and GE are changing models to the LEAP engine, which has faced some delivery delays. The engines power the latest version of Boeing 737 and about half of the A320neo line sold by Airbus, which said earlier it planned to raise its 2019 output target to 63 a month from 60.

“As of today, we are not in a position to commit ourselves to higher volumes,” Safran CEO Philippe Petitcolin said.

“We understand the needs of our client and if we are able to respond favourably we will do so, but we don’t want to start discussions on a commitment beyond what was agreed 18 months ago, (before)...early 2019,” Petitcolin told reporters.

It was not immediately clear whether a higher Airbus target of 63 jets a month, which has been circulating for some time, had already been anticipated in those previous discussions.

Petitcolin said Safran was predicting 1,100 LEAP engine deliveries in 2018 - a number slightly shy of GE’s forecast - as a matter of caution, but did not exclude output reaching 1,200.

Safran has previously adopted a conservative view on production increases as engine makers adapt to the new models and put increased demands on an already stressed supply chain.

Reporting by Tim Hepher, Cyril Altmeyer; Editing by Sudip Kar-Gupta

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