Jet engine maker CFM to invest $2 billion to speed repairs
CFM's Investment and Industry Impact
By Tim Hepher
Overview of the $2 Billion Investment
FARNBOROUGH, England, July 18 (Reuters) - Jet engine maker CFM said on Saturday it was investing $2 billion over five years to help meet targets of faster maintenance times, part of efforts to ease engine-industry bottlenecks that have drawn fire from airlines.
The world's largest engine maker by number of units sold said the effort by co-owners GE Aerospace and France's Safran would also accelerate repairs, help suppliers improve deliveries and beef up spares inventory.
Industry-Wide Repair Crisis
Unexpected wear and tear in the most recent jet engines - an unplanned by-product of their significant fuel savings - has led to an industry-wide repair crisis and left jets grounded.
CFM's Position and Competitors
CFM President Gael Meheust declined to be drawn on an engine industry dispute with airlines over prices, saying it was important to consider all relevant costs and engine performance.
CFM, which makes engines for the Boeing 737 MAX and competes with Pratt & Whitney on the Airbus A320neo, said it had a "near-zero" level of engine-driven groundings. Pratt has reported steady improvement in maintenance delays and production issues.
Airline Repair Shops and Maintenance Strategies
Aftermarket Investment and Airshow Competition
AIRLINE REPAIR SHOPS
CFM's aftermarket investment comes as engine makers are expected to battle for new business at next week's Farnborough Airshow, vying for attention with relatively muted plane orders.
Potential IndiGo Deal
India's largest carrier IndiGo could pick CFM's LEAP to power 500 previously ordered Airbus jets, industry sources said.
The deal is likely to include its own maintenance, repair and overhaul (MRO) shop, echoing Ireland's Ryanair.
CFM declined to comment and IndiGo could not be reached.
Turkish Airlines Negotiations
However, there were no immediate signs of a breakthrough in talks between CFM and Turkish Airlines (THY) that overshadow a deal for 150 Boeing 737 MAX jets announced by Turkish President Tayyip Erdogan in Washington in September.
The airline said then that the MAX order, part of a wider package of 225 jets, would be subject to engine negotiations.
Industry sources said the airline wanted under any deal to penetrate the top rung in CFM's tiered support network by becoming a so-called Premier MRO, joining a small group of carriers that enjoy enhanced access to repair technology.
CFM declined to comment. Turkish Airlines did not immediately respond to a request for comment.
Technological Upgrades and Future Goals
CFM also said it had won approval for an upgrade that would improve durability of LEAP-1B engines for the MAX in harsh climates, echoing a fix already available for Airbus.
It reiterated a goal of 15% higher deliveries this year.
(Reporting by Tim Hepher; Editing by Aidan Lewis and Andrea Ricci)
