PARIS, April 30 (Reuters) – French manufacturer of aircraft engines and equipment Safran on Friday announced a 38% drop in first-quarter revenue, but maintained full-year guidance as companies airlines face a bumpy recovery from the coronavirus pandemic.
Managing Director Olivier Andries said the slowdown reflected continued uncertainty over the industry’s worst crisis, but expressed optimism that demand for medium-haul models that support much of the business’s business will pick up relatively quickly. Saffron.
Safran co-produces the engines of the Boeing 737 MAX family and competes with Pratt & Whitney on the Airbus A320neo in the most active segment of the airliner market through their company CFM International.
Safran, which warned of a delayed recovery in the engine services market, said its closely watched revenue in the civilian aftermarket fell 53.4% in dollars in the first quarter.
Airline traffic in March showed signs of improvement after stagnating in January and February. It remains weak in Europe and Asia outside of China, the company said.
Total revenue fell 37.9% to 3.342 billion euros ($ 4.1 billion) from 5.383 billion.
Safran’s seating business has been “strongly impacted” by the COVID-19 pandemic, which has sharply reduced long-haul air travel.
However, it won an order for business class seats from a “major US airline” for the future Airbus A321XLR.
Industry sources said Airbus was asking engine makers for more thrust to refine the jet’s design.
Andries said CFM had supplied an engine meeting Airbus requirements and that there was “nothing new” about the project.
He said Safran would closely monitor its supply chain as planners forecast large increases in production next year.
The update comes as Safran, MTU Aero Engines of Germany and ITP Aero of Spain announced an agreement to produce, develop and support an engine for a new European combat aircraft, the Future Combat Air System.
Andries said Safran would retain control of the engine design under the plan, which extends an earlier agreement between Safran and MTU. A demonstrator will be powered by the existing M88 engine designed by Safran and used on the French Rafale fighter.
($ 1 = 0.8253 euros) (Reporting by Tim Hepher; Editing by Sudip Kar-Gupta and Edmund Blair)