CFM sees strong aero demand but inflation risk

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French-U.S. engine maker CFM International on Saturday forecast strong aircraft demand over the next two decades, but voiced fears over the pressure on raw material costs as production hits new records.

CFM, a joint venture of General Electric and France’s Safran, makes the world’s most-sold engine which powers all Boeing 737 jetliners and some competing Airbus A320s.

The company predicted on the eve of the Paris Air Show that airlines would need 35,000 aircraft in the next 20 years, two thirds of them in the narrowbody 737/A320 class.

Half of these will be to replace existing aircraft.

Boeing and Airbus have both announced sharp increases in production to cope with the demand which is driven mainly by growth in Asia and the Middle East.

CFM said it already bought its supplies of high-strength titanium for use inside its engines for the next two years.
“We don’t see pressure from shortages of raw materials, but we do on price as we get into an inflationary environment,” Executive Vice President Chaker Chahrour told reporters.

Airbus is revamping its 150-seat A320 aircraft with new engines being developed by both CFM and its rival Pratt & Whitney to help airlines reduce fuel costs.



CFM executives said they would announce “a lot of good news” on CFM Leap engines for the revamped A320neo plane next week.