Saturday, 15 May, 2021

The Silvercrest, the only snag in Safran’s faultlessness

The French group, driven by the health of the aeronautics sector, published record 2015 results. Only downside: the 18 months delay of Silvercrest, its new engine for business jets.

Safran's Silvercrest engine

The report card was almost perfect. Driven by the record order books of Airbus and Boeing (12,600 planes to be delivered between them, or 1,500 billion euros), the French equipment manufacturer Safran published remarkable results on Thursday February 25, just like Thales two days earlier . Turnover up 3.9% to 17.4 billion euros, operating income up sharply (2.4 billion, 13.6%), debt halved, margin at 14%: the group fully benefits from the increase in production rates of aircraft manufacturers, which mechanically increase the deliveries of its engines, landing gear, brakes and cabling.

The numbers are staggering. With its American partner GE, Safran produced 1,612 CFM56 engines in 2015, a new record. And the ramp-up has only just begun. Building on the incredible success of the Leap engine, which powers the A320neo, the 737 MAX and the Chinese C919 (10,000 orders in all), Safran and GE have 13,252 engines in the backlog, of which 2,135 were ordered in 2015 alone. “We have a 70% market share on future single-aisle, and 53% on the A320neo,” says Philippe Petitcolin, CEO of Safran.

1,000 net recruitments per year in France

Even when it comes to recruiting, Safran is playing the good guys: the group has recruited 24,000 people around the world for three years, including 10,000 in France. “We have created 1,000 net jobs in France per year for three years”, underlines Philipe Petitcolin. In particular, the group opened a new factory for fan blades (the blades at the engine inlet) in Commercy (Meuse), in November 2014. It is also investing in Villaroche, the assembly plant for civil and military engines. , with two new lines dedicated to Leap. “A third could be decided if necessary by 2018-2019,” said Philippe Petitcolin.

So why did Safran miss the perfect match? The answer lies in one name: Silvercrest. The French group is bogged down in the development of this jet engine for business jets, its first engine in this segment dominated by Honeywell, GE, Pratt & Whitney and Rolls-Royce. Result: the certification of Silvercrest was 18 months late, Dassault postponing by two years the commissioning of the Falcon 5X, now scheduled for 2020. Safran had to make a provision of 654 million euros for the 2015 financial year, equivalent to its entire investment in the program.

No room for error on Silvercrest

Safran has no right to miss it. Dassault, which will most likely ask for late payment penalties from its supplier, is now the only client of Silvercrest. Cessna had also chosen the engine for its Longitude business jet, but changed its mind last November: the Longitude having been redefined to be more compact, the American manufacturer preferred a less powerful engine, built by Honeywell. Safran is nevertheless confident: “We have now identified the technical solutions to the Silvercrest problems,” assures Philippe Petitcolin. We have reached the stage where we and our client Dassault are sure of our success. ”

Fortunately for Safran, the Silvercrest is just a drop in the ocean of its civilian engines. The production of business jet engines will represent at best for the group only a few dozen units per year at the beginning of the next decade, the segment not being intended to exceed 5% of the turnover of the subsidiary. Snecma. The Leap, it will be produced by this time to 2,000 copies per year.

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