Safran chooses France to build a major new carbon brakes factory

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• Safran shares rise as French jet engine maker raises outlook

  Safran, the French aerospace company, raised its annual forecasts on Thursday after reporting higher-than expected first-half profit. Its shares rose more than 4% thanks to a brisk demand of spare parts for jet engine. Safran, who together with GE Aerospace produce engines for Airbus medium-haul aircraft and Boeing long-haul jets reported higher maintenance profits, and its cabin interiors business, which had been struggling, saw further progress in the black. After certain adjustments, the company's closely-watched recurring operating income increased 27% to 2,51 billion euros ($2,87 billion) as revenues rose 13% to 14,77 billion euros. According to a consensus compiled by the company, analysts expected an average operating profit of 2,39 billion euros for the first half of 2014 on revenues of 14,74 billion euros. Safran has raised its forecast for the full year of the same profit measure from 4.8 to 4.9 billion euros to a range between 5.0 and 5.1 billion euro. This is an increase over a previously stated range. It forecast revenue growth of the low teens instead of 10%. Analysts at Bernstein said that Safran's aftermarket indicators, which are used to determine how much money engine manufacturers make during their regular visits to engine shops, exceeded expectations. Analysts say that the growing demand for air travel and the shortage of planes caused by a lack of deliveries from aircraft manufacturers have forced airlines into flying planes longer. This has led to extra maintenance. Safran shares rose 3.9% at midday. Shares of UK engine manufacturer Rolls-Royce rose also After improvements in its large wide-body engines led to strong first-half performance, it raised targets. ENGINE AGREEMENT Airbus, a jet maker that has been firing at engine manufacturers for delays in delivering new engines into jet factories because parts are diverted to repair shops to keep existing aircraft flying. Airbus and CFM have been strained by the tug-of-war between airplane hangars and aircraft factories over parts, while Pratt & Whitney, a rival engine manufacturer is gaining ground. Also under scrutiny Safran CEO Olivier Andries admitted that CFM was behind on deliveries to Airbus, partly due to a French strike. But he told reporters that the plans to catch up were "challenging, but totally achievable". He confirmed that CFM and Airbus had reached an agreement on the number of engines to be delivered in the remainder of the year, as the planemaker strives towards its delivery target. Airbus CEO Guillaume Faury On Wednesday The engine makers have agreed to help meet its delivery targets. Safran announced separately plans to build a carbon brakes plant in France, near Lyon. This follows a competition with Quebec and Oregon State, U.S.A. for the new major site. Safran, which was founded 20 years ago by the merger of Snecma, a state-owned engine manufacturer, and Sagem Electronics (now part of Sagem), acquired the Collins Aerospace actuation and control business for $1.8 billion last week. The company also sold a small U.S. operation to comply with the demands of regulators for the Collins acquisition. Safran estimated that the combined transactions will add between 600 and 700 millions of euros to the group's revenues for the remainder of the year.

• Heathrow airport in London is hit with more flight cancellations following an air traffic failure

  On Thursday, at least 16 flights were cancelled to and from London Heathrow Airport. This was a day following widespread disruptions caused by technical issues with Britain's air-traffic control system. National Air Traffic Services, which controls air traffic for planes in UK airspace as well as the eastern part North Atlantic, announced on Wednesday that its systems are fully operational and capacity has returned to normal following the switch to a backup system. Cirium, an aviation analytics company, reported that the second NATS outage in two years also affected Gatwick Airport, near London, Edinburgh Airport, Scotland, and other locations. As of 1830 GMT, Wednesday, there were 122 cancellations. Heidi Alexander, Transport Minister, said that she would be meeting with NATS Chief Executive Martin Rolfe to "understand what happened and prevent a reoccurrence". Alexander, a social media user on X, wrote that NATS works closely with airports and airlines to clear up the backlog. Heathrow’s website indicated that 16 flights were cancelled Thursday, including those to and from New York, Berlin and Toronto, as well as departures. In March, the airport, Britain's biggest and Europe's busiest was also affected by an electrical fire in a sub-station, which left thousands of passengers stranded. Neal McMahon, Ryanair's Chief Operating Officer, called for NATS' Rolfe resigning. He said that no lessons were learned since the August 20, 2023 disruption brought about by a malfunction in the automatic processing flight plans. NATS did not respond immediately to an inquiry about McMahon’s remarks, despite apologising to those who were affected by the incident on Wednesday. (Reporting and editing by William Schomberg, Catarina demony)

• Air France-KLM and Lufthansa defy worries about a trade war with Q2 growth

  European airlines Lufthansa, Air France-KLM and United Airlines reported higher profits in the second quarter on Thursday. This was despite concerns that U.S. tariffs and economic uncertainty could affect transatlantic travel. The transatlantic routes are the most profitable for airlines. In recent years, British Airways owner IAG has benefited from this as European competitors have struggled. Delta was among the U.S. carriers that abandoned their full-year forecasts in spring due to a weakening of travel demand. This followed President Donald Trump’s tariffs, which shook consumer and business confidence. However, European airlines are bucking this trend. Lufthansa reported on Thursday that demand for its premium products in the United States was strong, despite the weakening dollar. Air France-KLM also highlighted the strength of their premium offerings. Lufthansa announced a 27% increase year-on-year in its second quarter operating profit, which reached 871 million euro ($995 millions), exceeding the analysts' average estimate of 805million euros. In a press release, Carsten Spohr, Chief Executive Officer of the company said: "Despite the fact that the second quarter saw a return to geopolitical crisis and economic uncertainty, we confirm today our positive outlook for this year." CONTRAST WITH THE UNITED STATES Bookings for U.S. Airlines have improved since late June, after a sharp decline in March and April following Trump's trade war. Although demand has stabilised, airline executives claim that it is still below the estimates made at the beginning of the year. The spending of price-sensitive travelers is also down, despite the uncertainty surrounding the U.S. economic situation and rising costs. Europeans are often known to be more price sensitive than Americans and have less spending power. The wealthy Americans who are visiting Europe this summer are not poor. Delta and United Airlines have performed better despite the fact that domestic U.S. travel is struggling, affecting budget airlines. FIXING WEAKNESSES, NEW STRENGTHS In a client note, Bernstein analyst Alex Irving stated that the investment in Italy's ITA Airways contributed a "surprisingly large" profit to group's bottom-line. Since the pandemic, Lufthansa struggled to cope with increasing labour costs and a slowdown in traffic from Asia. The airline issued two profit warnings. The company stated that the decision to focus on Italy as a cost-savings measure was paying off. Rome is much cheaper to maintain than German base. Air France-KLM’s operating profit for the second quarter rose to 736 millions euros, up from 513million euros a year ago. This is in line with analysts' expectations. Air France has been able to capitalize on the strong demand for flights to Paris, and its appeal as a luxury French airline. KLM has had ongoing problems at Schiphol Airport near Amsterdam.

• Heathrow airport in London is hit with more flight cancellations following an air traffic failure

  On Thursday, at least 16 flights were cancelled to and from London Heathrow Airport. This was a day following widespread disruptions caused by technical issues with Britain's air-traffic control system. National Air Traffic Services, which controls air traffic for planes in UK airspace as well as the eastern part North Atlantic, announced on Wednesday that its systems are fully operational and capacity has returned to normal following the switch to a backup system. Cirium, an aviation analytics company, reported that the second NATS outage in two years also affected Gatwick Airport, near London, Edinburgh Airport, Scotland, and other locations. As of 1830 GMT, Wednesday, there were 122 cancellations. Heathrow’s website indicated that 16 flights were cancelled Thursday, including those to and from New York, Berlin and Toronto, as well as departures. Heathrow Airport, Britain's and Europe's busiest, has not responded to an immediate request for comment about the recent cancellations. Neal McMahon, Ryanair's Chief Operating Officer, called for NATS CEO Martin Rolfe's resignation. He said that no lessons were learned since the August 20, 2023 disruption caused due to a malfunction in the automatic processing flight plans. NATS did not respond immediately to an inquiry about McMahon’s remarks after it apologized to those who were affected by this failure on Wednesday. In March, Heathrow also suffered a fire in a sub-station that stranded thousands. (Reporting and Editing by William Schomberg.)

• After 25 people are injured by turbulence, a Delta flight is diverted to Minneapolis.

  The airline released a statement saying that 25 people were hospitalized on Wednesday, after a Delta Air Lines flight diverted from Amsterdam to Salt Lake City due to severe turbulence. Delta Airlines said that flight DL56 had been diverted to Minneapolis-Saint Paul International Airport due to "significant turbulence". New York Times, citing airline, reported that the plane carried 275 passengers, and 13 crew. Delta said that medical personnel evaluated all passengers after the A330 900 landed safely at Minneapolis. Twenty-five people on board the plane were taken to hospitals in their locality for treatment and evaluation, it stated without providing any further details. After reaching an altitude of 37,000 feet (11 277.6 meters), the aircraft experienced turbulence. It briefly climbed to 38,000 feet, before descending to just under 35,800 feet. Flightradar24, a flight tracking service, reported that it stabilised at 37,000 feet. (Reporting and editing by Kate Mayberry in Bengaluru, with Disha Mishra reporting from Bengaluru)

• Safran invests heavily in France to develop new carbon brakes

  Safran, the French aerospace company, announced on Thursday that it would build a carbon brakes plant in France. This is a significant investment in France after a highly-publicized competition against alternative sites in America and Canada. Once completed, the 30,000 sq. ft. facility in Lyon, a partially-state-owned company that builds jet engines, competes with RTX's Collins Aerospace unit to sell other equipment such as brakes and landing gear. The announcement confirms, along with higher earnings for the mid-year period, a report published on Wednesday, that the Paris-based company was set to choose France as its fourth plant, following a highly-sensitive contest, overshadowed in part by concerns about energy supply. In France, President Emmanuel Macron, who has made reindustrialisation a priority in his political agenda, is closely monitoring the outcome of this long-delayed competition. Meanwhile, U.S. president Donald Trump wants Europe to invest more money in the United States. These investments must be planned out years in advance due to the size of factories. However, the decision has been pushed back by energy and trade politics. The original plans to build the site in Lyon (France's third largest city) were scrapped due to the COVID-19 Pandemic of 2020 and the sharp increase in energy prices that followed the Russian invasion of Ukraine. Safran CEO Olivier Andries made a statement in which he acknowledged that the state-owned electricity utility EDF had supported the decision to locate the plant. The plant will be based on biomethane, and it will use low-carbon electricity. The cost of carbon brakes can be accounted for by energy. Industry sources claim that Safran and EDF had clashed over the supply of cheap supplies in the past, but tensions have eased since the recent change of management at EDF. Safran, the company that pioneered carbon brakes on jetliners and Formula 1 cars, claimed they were lighter, more durable, and allowed airlines to save fuel. Safran said that the new site in the Plaine de l'Ain Industrial Park will start operations in 2030. It will allow the company to increase its production by 25 percent between now and the year 2037, by joining a three-site network in France, USA and Malaysia.

• Air France-KLM Q2 profits rise, thanks to premium sales

  Air France-KLM announced a higher operating profit for the second quarter on Thursday. The sector is worried about the impact of President Donald Trump’s tariff war. Major European airlines are watching for any possible drop in transatlantic travel, as Europeans have resisted booking trips to America this year. Air France-KLM has highlighted the importance of its new first-class cabin as well as its strong sales in its premium economy cabin. This is especially true for KLM. Ben Smith, Chief Executive Officer of the company said that "we are advancing premiumization and pushing the boundaries for aspirational travel by offering enhanced products and service." The second-quarter operating profits rose from 513 millions euros to 845 million euros compared with the same quarter in last year. This was in line with an analyst poll compiled and conducted by LSEG, which predicted 760 million euro. Summer travel is an important test to see how carriers such as Air France-KLM will fare in the second half of this year. Air France-KLM had previously stated that it had reduced some economy fares in order to remain competitive. It confirmed its full-year outlook.

• Lufthansa confirms its full-year profit guidance after beating Q2 forecasts

  Lufthansa announced better-than expected second-quarter results Thursday, thanks to low oil prices, currency effects and other factors. It also confirmed its full-year forecast. Lufthansa's analyst poll revealed that the German airline group had reported an operating income of 871 millions euros ($995.3) compared to a forecasted 805 million euro. This is a 27% increase compared to the 686 millions euros reported for the same quarter in last year. The company said that the increased earnings were mainly a result of its expanded passenger flight program, positive effects from the investment it made in Italy's ITA Airways, and a doubled operating result in the logistics segment. In a press release, Carsten Spohr, Chief Executive Officer of the company said: "Despite the fact that the second quarter saw a return to geopolitical crisis and economic uncertainty, we confirm today our positive outlook for this year." Lufthansa struggled to cope with the spiraling costs of labour and a slowdown in traffic from Asia. It issued two profit warnings at the end of last year. Spohr stated that Lufthansa’s core brand has made significant improvements in punctuality, operational stability and reliability despite ongoing restructuring efforts. Lufthansa said that demand for flights in the United States was also strong, despite the weakening of the U.S. Dollar. Major European airlines are closely monitoring the possible drop in transatlantic travel, as Europeans have been reluctant to book trips this year. After the announcement of tariffs by President Donald Trump, a number of U.S. carriers, including Delta Airlines, lowered their forecasts for this spring due to a weakening of travel demand. Virgin Atlantic warned earlier this year of a slowdown in transatlantic bookings.

• Safran chooses France to build a major new carbon brakes factory

  Safran, a French aerospace company, announced that it will build a new factory for carbon brakes at the Plaine de l'Ain Industrial Park near Lyon. This is a major investment in France by the company following a competition between sites in France and the United States. Once completed, the 30,000 sq. ft. facility, owned by a partially state-owned firm, will represent an investment of more than 450 million euro ($514.4m). Safran said the new site would begin operating in 2030, and that it would allow Safran to gradually increase its volume by 25% by 2037. Reports on Wednesday indicated that Safran would choose France to be the location of its fourth plant, following a highly-sensitive contest overshadowed with concerns about energy supply.

• Safran, France's aerospace company, raises its 2025 outlook following higher mid-year profits

  Safran, the French aerospace company, raised its forecasts for next year after announcing higher than expected first-half earnings on Thursday. This was due to brisk demand of spare parts for jet engine. Safran, who together with GE Aerospace produce engines for Airbus medium-haul aircraft and Boeing long-haul jets reported higher maintenance profits, and its cabin interiors business, which had been struggling, saw further progress in the black. After certain adjustments, the company's closely-watched recurring operating income increased 27% to 2,51 billion euros ($2,87 billion), while revenues rose 13% to 14,77 billion euros. According to a consensus compiled by the company, analysts expected an average operating profit of 2,39 billion euros for the first half of 2014 on revenues of 14,74 billion euros. Safran has raised its forecast for the full year of the same profit measure from 4.8 to 4.9 billion euros to a range between 5.0 and 5.1 billion euro. This is an increase over a previously stated range. It forecast revenue growth of the low teens instead of 10%. Safran, which was founded 20 years ago by the merger of Snecma, a state-owned engine manufacturer, and Sagem Electronics (now part of Sagem), acquired the Collins Aerospace actuation and control business for $1.8 billion last week. The company also sold a small U.S. operation to comply with the demands of regulators for clearing Collins' acquisition. Safran estimated that the combined transactions will add between 600 and 700 million euro to the group's revenues for the remainder of the year. (1 dollar = 0.8747 euro) (Reporting and editing by Tim Hepher)

• Sources say Safran chooses France for major investment over Canada and the US

  Two people with knowledge of the matter say that the French aerospace company Safran will choose France to house a new carbon brakes factory worth 400 million euros ($458,48 million). This follows a competition between France, the United States, and Canada. People who asked not to be identified said that the politically sensitive decision could be made as soon as Thursday. The decision is subject to the approval of the board of the aerospace supplier and has been overshadowed in part by the debate about energy prices. Safran, the company that pioneered the use resilient carbon brakes in Formula 1 racing cars and aircraft, declined to comment. Location of the fourth plant in France is under close scrutiny. President Emmanuel Macron, who has made reindustrialisation a priority political goal, is pushing Europe to increase investment there. In 2019, the partially-state-owned French company plans to open a factory in Lyon, France’s third largest city, for energy-intensive brake production. This will join three existing plants already in France, Kentucky, and Malaysia. COVID-19 AND SOARING Energy Prices In 2020, the COVID-19 pandemic stymied the idea. And in 2022 plans to renew the project in order to capitalize on a rise in air travel were delayed for 18-24 more months due to the escalating energy prices in Europe following Russia's invasion in Ukraine. Safran said that it would consider three main criteria, including competitive energy prices and stable and clean supply based on nuclear and hydraulic power. It will also look at a 10-year price visibility. In December last year, Olivier Andries, the CEO of a major French company, also mentioned criteria such as "economic and political stability". He said that France was his company's top choice, but that the abundant hydroelectric power in Quebec and Oregon's regulated prices for energy were also attractive options. Sources said that the race eventually narrowed to France and Canada. Carbon brakes last longer and are lighter than traditional brakes, but they require a large capital investment to build large industrial facilities. These large facilities consume a lot of gas (from which the carbon can be extracted) and electricity for large ovens. Electricity can account for up to 40% of costs. Industry sources claim that Safran and the French state EDF had fought in the past over the availability of supplies at affordable prices. However, tensions have eased since the recent change of management at EDF. Safran's brakes unit competes against RTX, a Collins Aerospace subsidiary, for airline contracts. Both suppliers are able to benefit from the high margins of aftermarket repairs, as brakes undergo regular refurbishment after heavy usage. Safran has a unit that specializes in carbon brakes, which are used for Formula 1 cars. McLaren entered the sport with Safran in 1984.

• Airbus reports higher quarterly profit and maintains forecasts

  Airbus, the European planemaker, posted higher-than expected second-quarter profits, thanks to its helicopter and defence units. It also maintained its full-year predictions as it seeks to reverse a decline in jetliner sales. The largest jetmaker in the world, which also produces satellites, fighters, civil and military helicopters and makes satellites - has announced that its adjusted operating profit nearly doubled to 1,58 billion euros ($1.81billion) while revenues remained roughly flat at 16,07 billion euros. The company also announced that it would increase its A330neo production target to five aircraft per month by 2029 in order to meet the growing demand for wide-body jets, while maintaining other production targets. Airbus's space business was expected to grow significantly, but its results in Defence and Space (the company's second largest division) and Helicopters were slightly better than forecasts. According to a consensus compiled by the company, analysts expected an adjusted operating profit of 1,47 billion euros for revenues of 15,78 billion euros during the second quarter. Airbus reported earlier a 5% decline in the first half deliveries of 306 aircraft due to engine delays. Airbus predicts an 820 aircraft increase for the entire year. Airbus continues to build aircraft while waiting for engines, but the delays are continuing to impact cash flow. Cash burnt more quickly than expected during the second quarter. The company has reaffirmed its financial targets, which exclude the impact of tariffs. However, CEO Guillaume Faury welcomed a weekend agreement between the EU and US to exempt aerospace from tariffs. Airbus has said that it expects a deal to be completed in the fourth quarter to purchase assets from Spirit AeroSystems. The struggling aerospace supplier is currently being split between Airbus, its US rival Boeing, and other parties to avoid its collapse. ($1 = 0.8721 euro) (Reporting and editing by Benoit van Overstraeten, Benoit Hepher)