Boeing and Airbus aircraft engine makers are scrambling to diversify titanium sources away from Russia as conflict in Ukraine threatens access to the metal needed to make critical aircraft equipment.
Russia’s VSMPO-Avisma is the main supplier to Safran, a French multinational based in King and Snohomish counties that buys almost half of its titanium from VSMPO-Avisma. As military tensions have built in recent weeks, the company has purchased titanium from distributors in Germany, he said on a conference call.
“We have been increasing our titanium stocks since the beginning of the year,” chief executive Olivier Andries said Thursday. “We have a few months ahead of us for engine parts and landing gear, so some time to ramp up to other sources.”
Rolls-Royce Holdings, with 20% of its titanium sourced from Russia, has also stockpiled and diversified its sources, CEO Warren East said in a separate earnings call. The metal is widely used in engines, fasteners and other aircraft parts due to its light weight, strength and resistance to corrosion.
The possibility of sanctions or other disruptions to the supply of key raw materials was highlighted on Thursday after Russia launched an attack on Ukraine following a troop build-up and fervent diplomatic efforts to avoid an invasion. The shortages could exacerbate existing supply chain issues that threaten a ramp-up in production for the two major aircraft makers.
“As long as the geopolitical situation remains calm, no problem,” Boeing CEO Dave Calhoun said in a Jan. 26 conference call. “If not, we are protected for a while, but not forever.”
Boeing announced a new agreement with VSMPO in November. Airbus said it sources titanium directly from the Russian company and through major suppliers through programs that take geopolitical risk into account.
“We are therefore protected in the short/medium term,” the European aircraft manufacturer said in an email. “We are closely monitoring the situation with our suppliers.”
VSMPO’s role in supplying nearly a quarter of the world’s titanium poses a threat to aerospace supply chains, Jefferies analyst Sheila Kahyaoglu said earlier this month. Howmet Aerospace Inc., which sources titanium from Japan, and Allegheny Technologies Inc., could serve as alternative suppliers, she wrote in a research note.
Safran’s CFM International venture with General Electric is the sole producer of engines for Boeing’s 737 MAX single-aisle jets and one of two suppliers of rival Airbus SE’s A320 series. London-based Rolls makes engines for large twin-aisle aircraft.
“A blockade would certainly create tension everywhere,” Andries said on Thursday.
Concerns over supplies of titanium and other metals over the next few months come on top of existing bottlenecks for raw materials and tight labor markets that have plagued sectors from aerospace to auto manufacturing.
Raytheon’s Pratt & Whitney unit said Wednesday that shortages of metal castings would delay shipments of about 70 jet engines to Airbus in the first quarter.
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Parts shortages, spurred by worker absenteeism at US sites linked to the omicron variant of the coronavirus, also caused Safran’s shipments to plummet. Raw materials like metals, resins and semiconductors are harder to come by, Andries said.
Suppliers are preparing their production with “a very complex situation to manage”, Airbus CEO Guillaume Faury said in an interview on February 17. He cited “access to raw materials being difficult and the prices very high, the price of energy very high, logistics around the world is a challenge and the prices are very high”.
In order to secure the technology and supplies of future commercial and military aircraft, Safran, Airbus and Tikehau Ace Capital agreed this week to buy the alloy and forging company Aubert & Duval from the French Eramet.
Outside the United States, Aubert & Duval is the only producer of special alloys capable of withstanding the extreme temperatures that will be required for a future European fighter aircraft.
“It’s highly strategic,” Andries said. “We needed to keep this strategic supplier not only afloat but performing.”