CFM re-allocates some engines in boost to Airbus, sources say

By Tim Hepher

MUNICH (Reuters) -Jet engine maker CFM has agreed to divert some engines to Airbus to narrow a supply gap as the planemaker battles to hit end-of-year targets, three people familiar with the matter said.

This month’s agreement follows a tug of war over supplies between planemakers and maintenance shops and is expected to involve CFM diverting to Airbus some engines that had initially been allocated to the aftermarket, the sources said.

The number of engines was not immediately clear, but the deal raises confidence that Airbus can take a step towards meeting challenging delivery targets of “around 770” aircraft for 2024, barring other supply setbacks, they added.

“We are working hard to meet demand from our customers and to maximise fleet utilisation,” said a spokesperson for CFM, which is jointly owned by GE Aerospace and Safran (EPA:SAF).

An Airbus spokesman said the company is working with its suppliers, including engine suppliers, to deliver on its commitments.

The agreement is expected to ease recent tensions between Airbus and CFM over the supply of engines, but it could disappoint some airlines that are eager for relief from long engine-repair waiting times for existing jets, a senior industry source said.

Engine makers routinely have to juggle the demands of planemakers, who need the right number of power units to meet targets for assembling new planes, and the aftermarket for spare engines or parts to keep existing airline fleets flying with the minimum disruption.

But a stronger than expected snapback in demand after COVID-19 pandemic, coupled with industrial snags and increased wear and tear, have left the two ends of the aircraft market fighting over access to a limited supply of engines.

Last week Airbus CEO Guillaume Faury pointed to increasing confidence over engine supplies, telling Reuters that CFM should be able to supply enough units but it would be “very tight”.