The French aerospace group Safran managed to generate a net profit of €352 million in 2020. The engine and aeronautical equipment manufacturer saw its adjusted turnover drop by 33% to €16.5 billion over the year due to the crisis in the aviation sector. Deliveries of CFM56 and LEAP engines totaled 972 units, against 2,127 in 2019.

The drop was due to both the reduction of production output of aircraft manufacturers, as well as the reduction in traffic which led to lower demand in maintenance, and thus in parts. This came in addition to the global grounding of the Boeing 737 MAX, of which Safran is the sole engine manufacturer through CFM International, its joint venture with GE Aviation.

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Safran expects to suffer from Boeing 737 MAX crisis
While presenting solid financial results for the year 2019, the French aerospace manufacturer Safran revised its forecast for 2020 to take into account the impact of the Boeing 737 MAX grounding and production interruption.
 

To remain profitable, the manufacturer had to cut costs. Four production plants were closed and research and development expenses were reduced by 35%. The global workforce fell from 95,000 to 79,000 employees.

“The total mobilization of all teams has enabled Safran to tackle this crisis and to deliver decent margins and cash flow generation,” CEO Olivier Andriès commented. “Although uncertainties and headwinds remain notably for the first half of 2021, I am determined and optimistic.” 

Safran noted a “recent slowdown in the resumption of air traffic in several regions of the world”, with the emergence of new variants of the virus leading to a new set of health measures in international travel. For 2021, the group forecasts a slight drop (2 to 4%) in its turnover. It expects to deliver over 800 LEAP engines.