Airbus, the European aerospace giant, has been compelled to delay its plans to increase the production of narrowbody jets due to engine supply shortages, primarily influenced by CFM’s cautious stance on ramping up deliveries. CFM, a joint venture between GE Aerospace and France’s Safran, is a key supplier of LEAP engines, which power not only Boeing 737 MAX jets but also a significant portion of Airbus’s A320neo fleet.
Impact of Engine Supply on Airbus’s Production Plans On Monday, Airbus announced a postponement of its multi-year narrowbody production increase, citing engine shortages among other supply chain issues. This decision also led to a reduction in its profit forecasts and a trimmed delivery target for 2024, causing Airbus shares to tumble. CFM’s hesitance to boost engine supplies to Airbus is seen as a crucial factor, especially given the ongoing challenges faced by Boeing, CFM’s other major customer.
Strategic Dilemma for CFM Amidst Dual Demands The current aerospace environment places CFM in a delicate position as it attempts to balance the demands of its two largest customers. Airbus had sought an increased share of narrowbody engine deliveries from CFM — aiming for around 75% up from the current 60% — to compensate for issues with its other supplier, Pratt & Whitney. However, this request comes at a time when Boeing is also relying heavily on CFM, particularly as it navigates its own set of challenges including an in-flight incident that has slowed its recovery efforts.
Broader Industrial and Competitive Context The dilemma for CFM is not just about meeting immediate customer demands but also about maintaining a strategic balance. Any significant shift in favoring one customer over another could disrupt long-standing industrial relationships. This is particularly sensitive as CFM marks its 50th anniversary, with a history of supporting both Airbus and Boeing through various industry ups and downs.
Comments from Industry Leaders and Analysts CFM has stated that the supply chain environment remains challenging but reassured that efforts are underway to meet the engine demands from all customers. Meanwhile, Airbus CEO Guillaume Faury has acknowledged the uncertainties around the 2025 production targets but expressed confidence in having the necessary commitments from engine manufacturers to support a ramp-up in production by then.
Outlook and Future Implications The situation underscores the complex interdependencies in the aerospace sector, where strategic decisions by one player can have significant ramifications across the industry. As CFM navigates its commitments, the broader implications for the competitive dynamics between Airbus and Boeing, and for the European aerospace industry’s strategic autonomy, will continue to unfold.
This ongoing scenario will likely influence future negotiations and strategic decisions within the aerospace industry as major manufacturers and their suppliers strive to balance operational capabilities with broader economic and competitive pressures.
