At Textron’s earnings call today, CEO Scott Donnelly announced that Textron is no longer developing the Hemisphere large cabin business jet, putting the program on hold because of a lack of progress by Safran in developing the Silvercrest engine. The Safran Silvercrest was also scheduled to power the Falcon 5X which was cancelled in 2017 for engine-related issues, specifically the high pressure compressor section of the engine.
The initial contract between Textron and Safran has been terminated with no financial impact to either party. Scott Donnely summarized the situation concisely: “The engine hasn’t yet demonstrated the performance required for the aircraft. We would certainly revisit it, but too much time has gone by here.”
Textron had suspended the Hemisphere in early 2017 and indicated that it would make a decision to proceed after Safran’s solution scheduled for June 2019. Donnelly indicated that the engine was the sole issue in cancelling the program, and that “there was only one engine suitable to meet the performance point.”
Safran agreed to terminate the contract, and its statement concurred that the engine does not currently meet all the objectives, but that the engine development has made the intended progress over the past 12 months. Additional testing for the engine is planned, but is likely doomed after causing the demise of two promising programs, the Falcon 5X and Citation Hemisphere.
While Safran has escaped without additional contractual liability, they also have no customer for an expensive engine development program that is on-going. A key issue is the degree to which Safran has harmed its reputation in the highly-competitive business jet engine segment, in which it competes with Pratt & Whitney, Rolls Royce, GE and Honeywell, all formidable players. The loss of trust with two airframe OEMs does not portend well for Safran’s future in this marketplace.
