Bloomberg News

Safran Forms Labinal Power as More Aircraft Use Electrics (1)

January 06, 2014

Safran SA (SAF), the French partner in the world’s biggest producer of engines for single-aisle airliners, combined its electrical-system activities into one business to provide planemakers with lighter powering technology.

The new Labinal Power Systems division includes the manufacturer’s aeronautic electrical-wiring interconnection systems; on-board power, maintenance and repairs for airborne electrical equipment; and engineering services for electrical systems, Paris-based Safran said today in a statement. Alain Sauret will be chief executive officer of the unit, which has 12,000 employees.

Safran is building on its experience as one of the top providers of electrical equipment for commercial aircraft as aviation technology shifts increasingly to electrical systems in place of hydraulic or pneumatic power. The French company bought Goodrich Electrical Power Systems in 2012 as part of a push into that area.

“Using electrical power lets you build lighter planes that cost less to operate, burn less fuel and cost less to maintain, creating a virtuous circle,” Sauret said in a phone interview today. Activities now included in Labinal Power generated about 1.4 billion euros ($1.9 billion) in revenue last year, a figure that will roughly double over the next decade, he said.

Stock Rises

Safran rose as much as 2 percent and was trading up 1.3 percent at 51.85 euros as of 4:14 p.m. in Paris. The stock, which is at the highest price since September 2000, has gained 58 percent in the past 12 months, valuing the company at 21.6 billion euros.

Sauret declined to estimate Safran’s proportion of the entire market for providing electrical power to planes, though he said the company ranks first worldwide in activities involving electrical interconnection, as well as wiring, and No. 2 in power generation, after United Technologies Corp. (UTX:US)

Labinal Power, which takes its name from Safran’s plane-wiring business, will consider any acquisitions that would build its position in the aeronautic electric-power industry, Sauret said. He declined to comment on whether the business is looking at a purchase.

A joint project with Honeywell International Inc. (HON:US) to develop electric taxiing on runways won’t be included in the new unit, Sauret said. The so-called “green taxiing” system is still in testing and development, with entry into service for new planes targeted for 2017. The technology is expected to reduce fuel consumption by 4 percent per flight for single-aisle planes, according to Safran.

Safran’s CFM joint venture with General Electric Co. (GE:US) is the exclusive manufacturer of engines for Boeing Co. (BA:US)’s 737 airliner as well as for the C919 being built by Commercial Aircraft Corp. of China. CFM competes with a venture of United Technologies’ Pratt & Whitney unit to supply engines for Airbus Group (AIR)’s A320 planes.

To contact the reporter on this story: Andrea Rothman in Toulouse, France, at aerothman@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net


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Companies Mentioned

  • UTX
    (United Technologies Corp)
    • $109.21 USD
    • 0.65
    • 0.6%
  • HON
    (Honeywell International Inc)
    • $95.19 USD
    • 0.47
    • 0.49%
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