Safran will “not be shy” in applying tariff-related surcharges to its airline and OEM customers as it seeks to insulate itself from the financial impacts of a looming trade war.
While Paris-headquartered Safran has a huge manufacturing operation in Europe – including its share of the CFM International narrowbody engine joint venture with GE Aerospace – like many tier-one suppliers, the company has a substantial global industrial footprint.
This sees parts moving through several countries prior to final assembly and onward customer delivery, leaving the firm vulnerable to the tit-for-tat imposition of tariffs in response to initial moves by US President Donald Trump.
Briefing analysts as the French aerospace giant presented its first-quarter revenues on 25 April, chief executive Olivier Andries said Safran was managing its exposure through a variety of mechanisms.
These include “optimising” logistics flows so products do not “stop by” the USA if no modification work is taking place.
“We can change the flow and go directly from country A to country B without stopping by the USA if it is not necessary,” says Andries.
Other strategies include making the most of free trade agreements such as the 2020 MCA deal between Mexico, Canada and the USA, which exempts aerospace products from tariffs, plus additional measures such as the use of bonded warehouses.
While Safran is “confident” its actions can reduce its “gross exposure” to the impact of tariffs, there will “remain a net exposure”, says Andries.
“We are engaged with customers – OEMs and airlines – and we will not be shy and will apply the tariff surcharges to the airlines and our customers.”
Safran’s propulsion business accounts for a large part of its “remaining exposure”, says Andries, but he points out the agreement with GE underpinning CFM includes a provision that the partners share equally transportation costs, including tariffs. These, in turn, will be passed on to customers, he says.
However, he stops short of providing any guidance on the potential impact of the tariffs on Safran’s 2025 performance, noting the rapidly changing situation globally: “The imposition is changing every week, sometimes every day.”
But Safran is facing additional pressure from its own suppliers who are in certain cases seeking to pass on inflationary cost rises, with some even “threating to stop deliveries” if the company does not acquiesce.
“We are monitoring the situation very carefully and containing the impact, but the fact is that the tariff situation creates a new element of potential disturbance in the supply chain,” says Andries.
“We are focussed on making sure we can deliver to our airframe and airline customers,” he adds.
Andries maintains the company is adequately supplied to recover output of CFM Leap engines over the following two quarters, following a 13% year-on-year fall, to 319 from 367, seen in the first three months of 2025.
CFM aims to increase Leap deliveries by 15-20% across the full year, up from a total of 1,407 in 2024, a figure that was well below the engine maker’s initial target.
Safran has seen a “strong improvement” from its suppliers, he says, “especially on the items that were pacing our 2024 deliveries”.
“So, I can say now that we are [well stocked] in our assembly lines to recover the slow start of the year.”
Despite the slow pace of Leap deliveries in the first quarter, revenues from Safran’s propulsion business rose by 19% to €3.6 billion ($4 billion), up from €3 billion in the same period a year earlier, driven by spare part sales.
Revenues in the equipment division also increased, to €2.7 billion from €2.4 billion, while the interiors business – a long-term underperformer – also posted an uptick, growing sales to €788 million from €676 million previously.
It was, notes chief financial officer Pascal Bantegnie, the first time the division’s sales performance had exceeded pre-Covid levels, beating first-quarter 2019 revenues by 8%.
At group level, revenues rose by 16.7% to €7.2 billion from €6.2 billion in the same period of 2024. Safran is maintaining its guidance for the full year, but has yet to factor in any tariff-related impacts.
