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February 26, 2024
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Air France-KLM has entered exclusive negotiations with CFM on a huge engine order for the 100 Airbus A320neo’s and A321neo’s plus 60 options it wants to buy for KLM, Transavia, and Transavia France.

In a media statement released on Monday night in France, the airline says “that after an extensive review of the offers available, the Group’s Board of Directors has chosen to enter into exclusive negotiations with CFM International for the acquisition of LEAP-1A engines to power its new fleet of Airbus A320neo and A321neo.”

Last December , the French-Dutch airline group announced its intention to purchase  100 Airbus A320neo family aircraft to renew the fleets of KLM and Transavia Netherlands, and to renew and expand the fleet of Transavia France. The order still needs confirmation with Airbus. Group CEO Ben Smith said in February this will be done after final selection of the engine.

CFM International already provides engines to the group for KLM’s and Transavia’s Boeing 737-700s, -800s, and -900s (CFM56-7B) and Air France’s Airbus A320ceo (CFM56-5B) fleets. But the neo’s are actually to replace these types, although Air France still has to decide which type will take over from the A320ceo family.

Benjamin Smith, CEO of Air France-KLM said: “We look forward to working with CFM International in the coming weeks through these exclusive negotiations. We are confident that our two groups will be able to continue a long-term relationship and to build a sustainable future together.”

The preference for the LEAP comes as something of a surprise given the Pratt & Whitney Geared Turbofan (GTF) at KLM on the Embraer E195-E2 fleet and on the Air France A220 fleet. Opting for the GTF would have given the Group an ideal opportunity for synergies from a technical and financial point of view. This goes to show that nothing is a deal until it’s signed.  The AF/KLM Group will be able to evaluate both engines side by side.  Selecting both engines does de-risk their fleet. And that is a positive given the inherent risks of running an airline. 

However, whereas the E2 and A220 do not offer engine choices, it would be amiss to not point out that the A320neo engine choice might have been influenced by French interests. There is absolutely no evidence of this of course.  It’s just an item worth noting as, perhaps, a factor if the engine makers offered equal economics and deals. After all, state ownership (28.6% at Air France; 11% at SAFRAN) has its benefits. 

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Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.

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