French aerospace firm Safran has enhanced, in the wake of the coronavirus crisis, measures it had already been implementing in response to the grounding of the Boeing 737 Max.
Safran’s activities include production of the CFM International Leap-1B engines for the Max as well as the Leap-1A powerplants for the Airbus A320neo family.
It says it is taking “very significant” actions including halting capital expenditure, redefining research and development objectives, and cutting direct and indirect costs.
“Safran will also use all schemes set up by governments, particularly short-time working,” it adds.
The manufacturer is setting up a new €3 billion credit line, with a term of up to two years, on top of its undrawn €2.52 billion revolving credit facility to December 2022.
Safran stresses that these financial measures – plus the withdrawal of its 2019 dividend, which would have amounted to €1 billion – give it “sufficient liquidity” to fund operational continuity.
“Our attention is focused on taking care of our employees and monitoring our customers and suppliers,” says chief executive Philippe Petitcolin.
“While preserving cash in the very short term, we are preparing to re-establish and strengthen operations when the situation recovers.”
Safran says that, in the immediate aftermath of the crisis, its Chinese plants are operational and work at its European plants is gradually restarting.
It is focusing primarily on employee protection – through adaptation of working practices – while also paying attention to the delivery schedules for its customers, and ensuring resilience of its supply chain.
Safran says it is yet to assess fully the financial impact of the outbreak and its response measures.
