Boeing Global Services (BGS) and Safran have agreed to establish a joint company to design, build and service auxiliary power units in a move that could threaten the dominance of Honeywell and United Technologies Corp.

The deal, which is expected to close in the second half of 2018, would elevate Safran from a niche position of supplying APUs mainly for helicopters and business jets. It also would add another in-house alternative for Boeing, as it seeks to increase its leverage in negotiations over traditional Tier 1 suppliers. Both partners will own a 50% stake in the new company.

Honeywell’s APUs are standard equipment now on all 737 models, while Pratt & Whitney supplies the APU for all 787s. The small gas turbines are used to start the engines and are a back-up power source for the avionics and other onboard systems.

“This strategic partnership will leverage Boeing's deep customer and airplane knowledge along with Safran's experience in designing and producing complex propulsion assemblies," said Stan Deal, chief executive of BGS.

BGS was formed nearly a year ago to build-up Boeing’s presence in the aircraft services market. Although a part of Boeing, the independent business unit maintains an agnostic approach to the market, suggesting the APU joint venture could pursue applications on aircraft made by Airbus and Boeing.

Safran has been supplying APUs since 1962, but has concentrated on a niche market for helicopters, business jets and some military aircraft, such as the Dassault Rafale fighter. The partnership with Boeing gives the French manufacturer a chance to break into the APU market for large commercial transports. It currently partners with GE Aviation to build CFM56 and Leap engines for Airbus and Boeing narrowbody aircraft.

“Together we are committed to delivering advanced APUs and world-class support to our customers," says Safran CEO Philippe Petitcolin.

Source: Cirium Dashboard