How Safran intends to take advantage of the lucrative maintenance market for its Leap engine

«Change of scale» in sight for the Leap, which entered service in 2016, as Jean-Paul Alary, president of Safran Aircraft Engines, insisted during a visit organized at the group’s Brussels site on Tuesday October 29. The production tool for this engine is on track, despite some bumps in deliveries, we must now focus on implementing the infrastructure necessary for maintenance operations and the repair of damaged parts.

To do this, the manufacturer is implementing an investment plan of more than a billion euros by 2028. And plans to hire 4,000 people worldwide by this deadline, i.e. a doubling of the workforce. The 8,000 employees will be distributed 50/50 between France and other countries, i.e. an increase in the French workforce – currently 2,500 people – of 45%.

A global network under construction

«The Brussels site is the seventh dedicated to Leap maintenance», welcomed Jean-Paul Alary. An extension is already planned for 2027. The day before, the project for a workshop in Morocco, in Casablanca, was revealed: it will be operational in 2026. Two announcements which follow a series of investments made over the last three years: in France, in Saint-Quentin-en-Yvelines (Yvelines), in Villaroche (Seine-et-Marne) and in Rennes (Ille-et-Vilaine), but also in India (in Hyderabad), in Mexico (in Querétaro) and soon in the United States. Within four years, these sites will have to be ready to ensure the maintenance of the Leap, developed and manufactured by the Franco-American duo of engine manufacturers within their joint company, CFM International.

At Safran, we do not hesitate to talk about “sprint» about this industrial challenge. It must be said that maintenance operations on this young engine are already beginning. Successor to the CFM 56, the Leap equips around 60% of Airbus A320neo and Boeing 737 MAX aircraft. For this type of equipment whose lifespan does not exceed 25 years, the first major inspection can take place within the first eight years. Two or three more will follow, not counting the lighter inspections. The engines equipping aircraft operated in harsh environments, such as in India and the Middle East, also arrive in the workshops, their high-pressure turbine blades having to be scrutinized.

The infrastructure linked to the maintenance of the Leap must therefore match the commercial success of this propulsion system, offering a reduction in fuel consumption of between 15 and 20% compared to the previous generation of engines. While more than 4,000 aircraft are currently equipped with this engine, Safran has an order book of more than 10,600 Leaps at the end of 2023. The group plans to double the Leap fleet by 2030. Hence the necessary ramp-up led by the group, which will reach an investment plateau around 2028 paving the way for reaping juicy profits.

Deliveries at half mast

Because maintenance activities constitute a martingale for Safran: they represent two thirds of the turnover of its Propulsion division. Which shows a profitability close to 20%. Which explains the group’s good results despite the drop in engine deliveries expected this year. They fell by 6% in the third quarter of 2024, compared to the same period of 2023, with 365 engines. However, the turnover of the Propulsion division increased by 9.2%.

Due to difficulties within its supplier chain, the group announced on Friday October 25 that it was counting on a drop in deliveries of 10% this year, instead of growth which should still be understood at the start of the year. year between 20% and 25%, then between 0 and 5% this summer.

However, Safran will not be responsible for maintaining the Leap alone, far from it. “Our objective is to share the market 50/50 by 2040 between CFM International on the one hand and third party players on the other.», Specified Jean-Paul Alary. Clearly, the French company is aiming for a long-term market share of 25%, the same for GE Aerospace, leaving half of the pie to competitors. A leap, compared to the CFM 56: the French industrialist only took 10% of the market share, compared to 30% for its American friend. These ambitions underpin a four-fold increase in the capacity of the Safran network for the Leap, compared to that dedicated to the CFM 56.

For the moment, the two acolytes largely dominate this market for Leap support activities, since they are the fathers of this engine. But little by little, other players will take over, reducing Safran’s share in relative value. A necessary sharing given the size of the cake, but also a requirement on the part of airlines wishing to bring in competition. Today, 14 licensed maintenance workshops have emerged, five of which are owned by major players such as the maintenance divisions of the airlines Air France-KLM, Delta Airlines and Lufthansa.

By 2040, Safran plans to carry out around 20 licensed competitors with around 1,200 major inspections per year, for a global market of around 5,000 visits of this type. Each is billed “several million euros», as confided at Safran, without providing further details, nor on the selling price of the engine.

Profitability to be achieved

But for Safran, future success is not just about the capacity challenge. The Frenchman particularly hopes that the new strategy put in place with his American teammate will bear fruit. Explanations? With the CFM 56, the French engine manufacturer and its partner competed in terms of maintenance. Nothing like this with Leap: since 2008, the tandem has planned to cooperate also for support activities, distributing operations at the level of each client, via the activation of each of their networks.

Another point of attention: if Safran must supply its maintenance network with engines and spare parts, it must not neglect the aircraft manufacturers. The general director of Airbus’ commercial aircraft activity, Christian Scherer, recently again expressed his annoyance with Safran’s strategy in terms of prioritization, which he believes would be to the detriment of his group.

Furthermore, the profitability that Safran is eyeing remains to be realized. Flight hour contracts are increasingly popular with airlines: 45% of Leap’s current fleet is covered by this type of contract. They certainly offer visibility but represent a greater risk for Safran, especially since the Leap engine is not immune to teething flaws as is sometimes the case at the start of new programs.

It also remains to improve the efficiency of maintenance operations. The duration of heavy visits exceeds a hundred days, compared to an average of 70 days for CFM 56. “The more the engine flies, the more it earns», summarizes Jean-Paul Alary. Safran seeks to reduce this costly downtime to around a hundred days by 2025.