Snecma's Services division is moving to seal its first maintenance deals with three airlines in the first half of the year. The French engine builder expects to create a series of joint ventures with the carriers to expand its maintenance arm into new markets.

The company intends to follow a trend set by General Electric (which it partners in the CFM56, CF6-80 and GE90 engines), Pratt &Whitney and Rolls-Royce. These engine makers are taking on maintenance business from airlines looking to divest maintenance, repair and overhaul activities.

Strong growth in the sector is expected in the next five years. Snecma president Jean-Paul Béchat says that the maintenance business is a good way of cushioning the company from the dramatic loss of income from engine sales that can occur during a recession.

Béchat's strategy is to create joint ventures, the first of which is likely to be signed with Sabena, "-which has a very good maintenance facility for General Electric engines in Brussels", says the Snecma boss. Next in line is Royal Air Maroc, "-which has a brand new facility and will give us access to the Arab airlines". A joint venture deal has been signed with China Southwest Airlines, Willis Lease Finance and Beijing Kailan on providing CFM56-3 maintenance at Chengdu. Béchat says negotiations for the full agreement are "going well".

Overall, the Snecma Group had a record sales year, with 22% growth, taking revenue to Fr28.1 billion ($4.5 billion). This primarily reflected strong sales of CFM56 engines for the single-aisle families of Airbus and Boeing. Production also broke all records, with the completion of 935 CFM engines. "We expect to see that increase to 1,130 in 1999 and then drop slightly to around 1,000 engines in 2001," Béchat says.

Engine manufacture accounted for 66% of business during the year, with equipment and services taking 21% and 13%, respectively. During 1998 Snecma became the number one landing gear manufacturer in terms of sales with the take-over of the TI group's share in Messier-Dowty. The Aircell subsidiary of Hispano-Suiza Aerostructures and Airbus Industrie was also formed, while a new division, Snecma Systemes, was established in September.

Source: Flight International