French jet engine manufacturer Safran has reported a major increase in revenue and operating profit for the fiscal year 2023, with optimistic projections for further growth in the coming year. The company's recurring operating income surged 31 per cent to 3.166 billion euros and revenue rose 22 per cent to 23.199 billion euros.

Safran's civil aftermarket revenues, a key metric closely monitored by industry observers, witnessed an increase of 33 per cent in dollar terms, reflecting strong demand for engine services. The company's strategic partnership with GE Aerospace in co-producing the LEAP jet engine has contributed majorly  to its market position. The LEAP engine powers all Boeing 737 MAX jets and approximately half of the Airbus A320neo jets.

However, Safran CEO Olivier Andries cautioned about potential impacts on LEAP-1B engine deliveries due to recent restrictions imposed by the US aviation regulator on Boeing's growth plans following safety concerns. While Andries acknowledged the possibility of such disruptions, he emphasized that it was premature to quantify their effects.

Regarding production strategies, Andries ruled out any immediate shift from the Boeing version of the LEAP engine to the Airbus variant for the year 2024. He noted that Airbus has not requested such a change. However, he hinted at the possibility of reevaluating production capacities for both versions in 2025 and beyond.

Meanwhile, Safran is engaged in discussions with the Italian government concerning Rome's decision to block a portion of its planned acquisition of Collins Aerospace's flight control systems business. The Italian Prime Minister's veto in November, citing national security concerns, halted Safran's proposed $1.8 billion purchase of Collins' Italian subsidiary Microtecnica. Andries stressed the importance of dialogue in resolving the issue, indicating ongoing efforts to find a mutually beneficial solution.

Safran's robust performance in 2023 underscores its resilience in navigating challenges within the aerospace industry while capitalizing on opportunities for growth, particularly in engine services. Despite regulatory hurdles and geopolitical considerations, the company remains focused on advancing its strategic objectives and maintaining its competitive edge in the market.

(With Reuters inputs)