Boeing and Safran Join Together for Exciting New Opportunity
Industry heavy-hitters The Boeing Company and Safran SA have recently started combining their capabilities, resulting in new auxiliary power units (APUs); APUs are onboard engines used to start the main engines, as well as power aircraft systems on the ground and in flight. Safran has already been in the business of APU-making, but now with the addition of The Boeing Co, they are sure to demand more of the market share from rivals Honeywell and UTC –the two leading manufacturers of this part.
Not only will this 50/50 venture benefit Safran Group, but it will also put Boeing in a better position as they strive to branch into more profitable services. As Boeing CFO Greg Smith put it,
“This move will strengthen Boeing’s vertical capabilities as we continue to expand our services portfolio and make strategic investments that accelerate our growth plans”
Boeing recently acquired aerospace parts company, KLX Inc, furthering their expansion into the aircraft services market.
Stan Deal, President and CEO of Boeing Global Services commented that
“This strategic partnership will leverage Boeing's deep customer and airplane knowledge along with Safran's experience in designing and producing complex propulsion assemblies to deliver expanded, innovative services solutions to our customers."
Currently, Boeing and Airbus SE are in competition to widen margins of third-party suppliers that typically dominate the repairs and services market.
Safran has also held a partnership with General Electric Co, allowing them both to make the LEAP-1B engines that go on Boeing’s 737 MAX. Prior to this partnership’s fruition, Safran had been supplying Boeing with an extensive range of components for their commercial and defense programs; this made it evident a partnership would bode well for both involved parties.