Company News

Safran targets 300 mln euros of belt-tightening over Boeing 737

PARIS, Feb 27 (Reuters) - Aerospace supplier Safran said it was targeting 300 million euros ($326 million) of cost savings and other measures to cope with the grounding of the Boeing 737 MAX.

Safran co-produces the jet’s engines with General Electric and makes the bulk of its cabling as well as a raft of equipment from oxygen masks to fuel systems, slides, lighting and cockpit doors after acquiring Zodiac Aerospace in 2018.

Safran said earlier on Thursday that it had drawn up an “adaptation plan” involving cost savings, a hiring freeze and lower R&D and capital spending for 2020.

Chief Financial Officer Bernard Delpit told reporters that the package represented around 300 million euros.

Chief Executive Philippe Petitcolin said talks were ongoing between Safran and Airbus about cost reductions being sought by the European planemaker for cabins on the A220 jetliner.

On the coronavirus crisis, Petitcolin told reporters the company’s targets assumed a progressive return to normal air traffic from the second quarter and that attendance at Safran’s Chinese factories had returned to between 74% and 95% of normal.

$1 = 0.9201 euros Reporting by Tim Hepher; Editing by Sudip Kar-Gupta