Safran "still working" on Avio Spazio

PARIS Thu Feb 20, 2014 2:19am EST

PARIS Feb 20 (Reuters) - France's Safran is "still working" on discussions surrounding the future of Italian space propulsion company Avio Spazio, its chief executive said on Thursday.

British private equity fund Cinven wants to sell its 81 percent stake in Avio Spazio and has said several buyers, including Safran, have expressed an interest. Airbus Group is also widely seen as a bidder.

"We are are still working," Safran Chief Executive Jean-Paul Herteman told reporters, but declined further comment.

Finance Director Ross McInnes said the aerospace, defence and security firm was "not standing still" on acquisitions after a total of almost 1 billion euros in deals in the past year.

Briefing reporters on 2013 results that included stronger than expected growth in civil jet engine overhauls, where Safran makes much of its profit, Herteman said this was partly due to a "catch-up" as airlines carry out deferred maintenance.

Experience of past economic crisis had shown that such spikes in demand could last a few years.

"The catch-up effect is well and truly there...(and) we have not reached the end of that period," he said.

Herteman said Safran, which together with General Electric co-owns the maker of the world's most-sold jet engine, the CFM56, could keep up with higher production demands from planemakers but declined to say what rates were being targeted.

Herteman said Safran saw no signs of dynamic recovery in Europe. He expressed few concerns about recent turmoil in emerging markets, saying long-term aviation growth was assured.

Jet engine repairs are seen as a barometer of economic activity because they are timed according to the number of flights, which in turn are closely correlated to GDP.

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