Ladies and gentlemen, welcome to the Safran Q3 2019 Revenue Conference Call. At this time, I would like to turn the conference over to your host Philippe Petitcolin, Safran's CEO; and Bernard Delpit, Group CFO. Mr. Petitcolin, please go ahead.

Thank you. Thank you very much. Good morning everyone and welcome on today's call to present our business highlights and revenue for the third quarter and the first nine months of 2019. As usual, the press release and the presentations are available on our website. To sum up the equity, we had a very robust revenue in Q3. And we are right on track to meet our fiscal year of 2019 revenue guidance as disclosed in early September. I will start with the highlights and will give the floor to Bernard for the financials. So let's start the presentation on the Slide 4, solid underlying business in Q3 and the first nine months of the year. In Q3 2019, we recorded revenue of Euro 6.1 billion, up 14%, and the organic growth sustained at 9.8%. For the first nine months of the year, the reported revenue growth was 22.5%, including, of course, the nine months contribution of the Zodiac activity and reached Euro 18.2 billion of sale. The organic growth increased by 12.6% with all divisions contributing positively. Going now to Slide 5 and give you an update on the CFM56-LEAP transition. For the first nine months of this year, the LEAP confirmed its status of engine of choice for airlines. Year-to-date, orders and commitments were recorded for 1,717 LEAP engines, bringing the total LEAP backlog to 15,778 engines. With regard to production, the LEAP ramp-up is still ongoing. We delivered 1,316 LEAP in the first nine months of 2019, compared to 741 engines in the year ago period, of which 455 LEAP in Q3 2019. LEAP-1A and LEAP-1B before of course the grounding of the MAX have accumulated together 5.7 million of flight hours. For CFM56 engines, the progressive ramp down is also ongoing as planned, 69 units were shipped in Q3 2019, compared with 243 in Q3 2018. We expect to deliver a little bit more than 350 CFM56 engines in 2019. Going on Slide 6, a few words on our highlights in Q3. In propulsion, beyond the CFM56-LEAP trrransssition, the Aerospace Propulsion segment did very well. Our civil aftermarket business increased by 9.2% in U.S. dollars in Q3 despite a strong comparison base in Q3 2018, where I remind you we had an increase in Q3 2018 of 19.2%. For the first nine months of 2019, the civil aftermarket grew by 9.8%, still in U.S. dollars, in line with our full year assumptions which I remind you was around 10%. As for H1 2019, this performance reflects the high demand for spare parts of the second generation of CFM56 engine. For military OE, we shipped the first six M88 engines for the Indian Air Force, Rafale, and the total delivery of this engine reached 20 units for this quarter. Our Equipment, Defense and Aerosystems segment through Q3 was also strong. Nacelle has continued to enjoy organic growth with ramp-up of both the A320 family and the A330neo family. We therefore delivered the 100th nacelle for the A330neo just one year after we started production. This division has also benefited from strong growth in services activities with several contracts such as with All Nippon Airways and Virgin. We also started new partnerships towards electrical aircraft with Boeing. We invested in Electrical Power Systems, a small U.S. company specialized in energy storage product. We also acquired a French start-up that works on electrical current sensors. In Defense, we have been appointed as designer of three major combat systems components for the Australia’s Future Submarine Program. Let's turn to Aircraft Interiors on Slide 7. As I mentioned in September, this business is starting to improve which is a good sign that customer confidence is returning, but we still have a lot of work to do. In cabin, we have been selected by Air France to retrofit ECOS overhead bins for 51 aircraft, basically the A320, A321 family. In seats, we have been selected by several major Asian and Pacific airlines to provide business class seats for Boeing 787. Virgin Atlantic started its A350-1000 commercial flight equipped with our Cirrus NG business class seats. Lastly, we started to deliver Air France with our Optima business class seats and our Z300 economy class seats for their 28 A350-900. In our Passenger Solutions activity, we welcome new contracts on IFE from Lufthansa, All Nippon Airways and -- that's mainly All Nippon Airways, which has also selected us for 787-8. I will now give the floor to Bernard for the financials.

I turn to Slide 10 for an update on our hedging portfolio. The hedging portfolio now totals Euro 29 billion in October. The annual exposure has been raised to Euro 11 billion for 2019 to reflect growth in our USD-related businesses, and it should remain at least at that level going forward. We started to hedge 2023 exposure with Euro 2.2 billion achieved so far and targeted hedge rates are confirmed for the 2019-2022 period, if FX landscape continues to stabilize between $1.10 and $1.12 per Euro 1, it could be improved and we will see that at the end of the year. On Slide 11, adjusted revenue has reached Euro 6.1 billion in Q3, up 14%. It includes Euro 44 million of change of scope due to electrical mechanical systems acquired at the beginning of the year from Collins Aerospace. The positive currency impact from the dollar due to the average spot rate as $1.11 this quarter compared with $1.16 in Q3 last year. So it is a 9.8% organic growth across all divisions. Slide 12, Aerospace propulsion revenues in Q3 Euro 2.987 billion, up 18.3% or 14.9% organic; equipment Euro 2.298 billion, up 12% or 6.5% organic; Aircraft Interiors Euro 805 million, up 4.7% or 1.4% organic. Some details on those Q3 figures on propulsion. OE growth was 18% up for civil engines, thanks to the mix, even though volumes were slightly down, reflecting rundown of CFM56. It was also positive for military engine as we shipped 20 engines for the Rafale, it was 13 in Q3 2018. Propulsion services were up 18.6% or 14.4% organic in propulsion. It reflects a 9.2% increase in civil aftermarket and growth in the helicopter maintenance. For civil aftermarket, the 9.2% growth is broken down with double-digit growth for parts and a mid-single digit growth for service contracts. On equipment, OE was up 7.2% organic, thanks to nacelle in defense and services for equipments were up 5.3% organic, thanks to carbon brakes and nacelle initial provisioning. For Aircraft Interiors, growth was weaker than in H1 with seats still up high-single-digit in Q3. Passenger Solutions up mid-single-digit in Q3, and cabin down in Q3 with lower Spaceflex deliveries and the impact of the MAX on our galleys delivery. Two additional comments for helicopter, OE sales declined as Q3 2018 was also very strong and services were up high-teens in Q3 this year as 2018 was weak. And I would also mention that the A380 nacelle organic is down due to the situation of this program. On Slide 13, the year-to-date revenue is now Euro 18.197 billion, up 22.5%. It includes Euro 184 million scope impact, of which Euro 781 million from the Zodiac integration and Euro 103 million from ElectroMechanical System purchased at the beginning of the year. It also includes Euro 580 million from currency hedging, so leaving 12.6% organic growth. On Page 14, I will not go into the details of our year-to-date activities. Year-to-date organic growth is 12.6%, 17.6% for Propulsion with civil and military OE up, and services also up 22%. It includes 9.8% of civil aftermarket, high-teens growth for helicopter maintenance and one-offs for military engine as we commented in H1. The 7.9% organic growth in equipment is balanced between OE and services and the 7.3% organic growth in Aircraft Interiors is caused due to negative growth for seats, as 2018 was a trough, slow growth in cabins as 2019 accounts was already a recovery year and a high-single-digit growth for Passenger Solutions. And now, I leave the floor to Philippe for the outlook.

Thank you, Bernard. Going on Slide 16, as a reminder, our 2019 guidance is based on the various assumptions as mentioned here. I will not come on them, as they are unchanged. Going to Slide 17, we confirm the fiscal year 2019 revenue and recurring operating income outlook that we presented in September. At an estimated average spot rate of $1.13 to the Euro in 2019, the adjusted revenue is expected to grow by around 15% in 2019 compared with 2018. On an organic basis, the adjusted revenue is expected to grow by around 10%. The adjusted recurring operating income is expected to grow comfortably above 20% at a hedged rate of $1.18 to the Euro. We are refining our free cash flow outlook. From June 30, 2019 Safran revised the free cash flow impact of the Boeing 737 MAX situation to approximately a loss of Euro 300 million per quarter or in other words a loss of Euro 100 million per month in Q3 and in Q4, to reflect the decrease of prepayments for future delivery. Based on an assumption of return to service for the Boeing 737 MAX in Q4 of 2019, the free cash flow is expected to be in the range of 50% to 55% of adjusted recurring operating income. In case the grounding of the Boeing 737 MAX continues until the end of 2019, we think now that the free cash flow to adjusted recurring operating income should be around 50%, previously we said below 50%, to take into account the agreement signed between Boeing and CFMI to receive an advance payment on LEAP-1B engines delivered to Boeing in 2019. We maintain that current Boeing 737 MAX grounding's impact on Safran's cash flow and any extension in 2019 merely represents a deferral in cash collection and should reverse in the following quarters. This is what we had to tell you. Thank you for your attention. And we are now at your disposal, Bernard and I, to answer any question you may have.

[Operator Instructions]. The first question comes from Olivier Brochet from Credit Suisse. Sir, go ahead.

Good morning, Philippe. Good morning, Bernard. I would have two questions or two sets of questions if I may. First of all, on the aftermarket, commercial aftermarket, would you be able to give us a bit of color around services versus spares in the quarter or on nine months and a bit of color around engine type CFM56 versus widebody, please? And the second question is on the change you've implemented on the hedge book. Why didn't you change the target rate for the year, given the -- I would say, probably low spot that you've been using around these new hedges? And can you help me understand what the impact on EBIT would be from this additional $1.6 billion of hedges, please?

Thank you, Olivier. I will try to answer the first question and will let Bernard talk about the impact of the change. On the aftermarket, the momentum we saw in the beginning of the year is continuing. If you remember, we had 10.2% increase in Q1 and Q2; 9.2% in the third quarter. But again the Q3 of 2018 was very high with an increase of more than 18%. We still enjoy in the spare part an increase at double-digit. And our services is lower, but something we were expecting, we have not really increased our capacity in services. So the level of services in terms of growth is not as high as much we can enjoy in the spare. We were a little bit disappointed by the quantity of shop visits on CFM56-7, which basically the one we -- which are on the NG. We believe based on the comments we get from our field service engineers which are at the airline sites, the airlines, as they don't have the MAX they try to fly their NG as much as they can and they try to postpone as much as they can the service or shop visit for their engines. We don't think, there's a problem, I even think it’s good for the medium term. But on a single quarter with a little bit of reduction compared to what we were forecasting in terms of quantity of shop visits for the CFM56-7. The business on widebodies was good. We weren’t so happy in 2018 because we didn't see a large growth on the widebodies but the widebodies are coming back to type of growth we were expecting. So, all-in-all, no change, no big change in third quarter compared to what we have seen during the first two quarters of the year. A good strong solid business in spare parts, with as I said, a small reduction in quantity of shop visits for the CFM56-7. And each airline we have interviewed gave us the comment I just gave you regarding the fact that they need to fly heir airplanes as much as they can and a good business in widebodies. I hope it answers the first question. Bernard, maybe I would change.

Yes. So as you said, Olivier, we haven't changed our hedge rate target, and we haven't changed it in 2019, even if the spot rate conditions are good. And I would say that this is precisely what we want to avoid. We want to avoid the volatility in the spot market to translate into a volatility of our P&L through the hedge rate, whether it would be good or bad, that is exactly what we want to avoid. So benefits of what we see now in terms of new transactions will allow us to keep hedge rates at this good level or even to decrease hedge rates going forward. This is the merits -- these are the merits of our clearly annual hedging policy.

Another question?

Yes, the next question comes from Celine Fornaro from UBS. Madam, please go ahead.

Philippe, if you could follow up a little bit still on the shop visit comments that you made at the slightly lower number of those. Would you know if they're more related to; number one, shop visit one or shop visit two, is there a way you could tell that? And also, my second question would be on the interior business. So we've had downgraded volumes on the 787. The 777X maybe pushed slightly to the right. How does that affect your 2021, 2022 top-line recovery in some of those businesses for the interior?

Thank you, Celine. Don't take this small comment on the shop visit as something very big. We are talking about 20, 30 shop visits difference, which is not a big number. And again for each shop visit which was delayed, we went to see the airline and said, "What's going on?" And basically the answer was, "Okay, we know we have to do our shop visit but we prefer to delay it as much as we can until we can use the airplane because we need the airplane." So it's a mix of first and second shop visit as we are talking about the latest generation of Boeing 73 NG and CFM56-7B. We are talking about first and second shop visit. And as you know for us that's two most important shop visits in terms of future revenue and margin. So I don't have the split to be honest for at least 20 or 30 shop visits between the first one and the second one, but it's a mix of both of them. And again, in my opinion it’s good because it's an additional business, good business that is going to come anyway in the coming quarter. Your second question related to delay of 777X and the reduction in quantity of the 787 -- 777X and 787, it is of course not good news for us. I mean we are on these new programs. And I'm not thinking about engines. I'm thinking about all the equipments and interiors we supply to these programs. Of course, when there is a reduction in quantity it’s not good news. But we will have to do with it, we have no choice. We have a partner of Boeing. And we will adjust what I have to do very quickly is to adjust my costs to this new quantity. And for the 787 and for the 777X, I have to adjust my costs in development, don't use the same quantity of engineers in development and certification when the certification is delayed by six months or one year. So it's a question of high activity in order to maintain the target we gave you in terms of guidance, which is key that we know how to do that. It happens on a regular basis. It happened on the A380 a couple months ago. It will happen again. We are not in a business where 10 years in advance how many products you will have to build. So, high activity, the flexibility is key in our business if you want to maintain a nice profitable growth of our recurring income.

The next question comes from Andy Heelan from Bank of America. Sir, please go ahead.

It's Ben from Bank of America, not Andy. I got two questions. First one on organic growth. Obviously very strong again in Q3 on a tough comp like you said, Philippe. Guidance for the full year implies a strong slowdown in the fourth quarter. So is there any color you can give us around why you're going to see that slow down? And then secondly on the investment with Boeing into the electric power systems business. Is this in a similar vein to the APU joint venture that you made with Boeing? So is this about growing exposure to Boeing over the medium term? Just if you could give us a little bit more color on the strategy around that acquisition. Thank you.

Thank you, Andy. No, that is not a big reduction of slow down of our business in Q4. We started at a very high level and we told you when we presented our H1 results in early September that for the year we were a bit too high during the first semester. And the second semester would be more in line with what we were expecting and what the market was expecting. So we now forecast and confirm the guidance of around 10%. We are 12.6% at the end of nine months. If we can do a little bit better, we will do a bit better. I cannot tell you exactly what is going to be the business in terms of the services, mainly the services is unknown for a little bit of the business. It’s never totally guaranteed. But you may have also very good news. So, all-in-all, I confirm that we will do at least this 10% of growth in terms of sales. But to give you an updated number at this stage would be -- will not be useful I think.

The only thing, Ben, that I would add on that is that, for example, on the helicopter turbines service, which was very strong year-to-date, we expect because of high comps in Q4, services to be slightly down in Q4. But for the rest of the business, I would say business as usual with the trends still positive.

Your second question Ben regarding our investment with Boeing in EPS. In fact EPS is a smaller American company which exists already where we decided to put some money, Boeing and us, as they have a very unique technology for the storage of batteries. They didn't really build the batteries. But they’ve a unique way of putting the batteries together in order to optimize the weight of the batteries and we believe there's a unique technology that we wanted to be part of like Boeing. It is totally different from the APU. The APU is a JV at 50-50 between Boeing and us. So we own with Boeing together 100% as a company called APU and we are going to develop and build APU. Regarding EPS it’s a financial participation of both Boeing and Safran in small companies where we believe there is a huge potential for the future.

The next question comes from Tristan Sanson from Exane. Sir, please go ahead.

Good morning, Philippe. And good morning, Bernard. Three questions if I may. The first one is on the aftermarket momentum and the double-digit growth in spare parts in Q3 despite lower shop visits. So if we're then going to include constant currency, we assume shop visits are about flat or slightly up, where it means price and wide scope are still including above average, price is what it is. But can you comment a bit on what is feeding that wide scope FX still after already a trend that was pretty reached in the recent past? That's the first question. The second is, if I understand correctly, this year, you are going to have an important tailwind in your activity from military OE, military services and helicopter services, which altogether are going to create the usual contribution of these businesses. And I know it’s a call to talk about sales, not profit but can you give us some feel for what would be the magnitude of the impact we could have over time from the normalization of these businesses going forward? Is it a three digit number in profit? Or something like that would be helpful. And finally, quick question on Spaceflex V2, which has been transferring deliveries of fresh sets that were pretty low in Q2 and Q3. Can you explain us a bit the momentum on that activity? It's probably a bit lumpy, but a bit more color on it would be helpful. Thank you very much.

I will try to answer the first question and let Bernard and I will complete if necessary for the second one, the third one. On aftermarket, again, there is in fact a reduction in the quantity of shop visits. I'm just saying that on the specific shop visits, I just wanted to be a bit more precise for the CFM56-7B we were not at the level of quantity we were expecting. But in general, there is growth of the quantity of shop visits, except that on this one we were not at our forecast at the end of Q3. And again, I understand why -- and I just wanted to share with you the reasons why we are not at this level, but we are talking again about a small quantity of services compared to the complete picture of the shop visits that we do in our business. We didn't see Tristan any change in the behavior of our customers regarding quantity of new spare parts they would use or level of maintenance they will need. We are still at a very high level and we didn't see any kind of change or trend of change from the airlines. So business remains very strong as I said. The spare parts remained with growth of double-digit. And we do not expect for the time being when we look in front of us, any change. Maybe Bernard on military OE and the services, our helicopter business.

Yes. Tristan, I will be more qualitative than quantitative on that at that stage of the year and I don't want to enter into a discussion about 2020 guidance at that stage. For the military services, it's something that we explained. We had some positive good news in H1. And we expect that military services and specifically on the Rafale and that will continue but we had some specific one-offs in H1. So you should expect military services to be down at least in H1 next year versus H1 this year. For helicopter maintenance, the point is that,you know that, two-thirds of our business in helicopter is through services. So it has been part of the IFRS 15 impact that in 2018 at the beginning of the year it was weak and we had some improvements in Q4 last year. So in 2019, we managed to do that, I mean the improvements every quarter and we -- it won't be as lumpy as it was in 2019. Now going forward in 2020, I expect that helicopter services business will continue to grow between 3%, 4%, 5% every year and including pricing and volumes. For our Spaceflex, I don't know what to say. In 2019, we have some strong volumes including some recovery in terms of delivery delays. So you don't have this kind of impact in 2019. In fact, the volumes are down. And this is one of the reasons why the cabin business was, I would say, sluggish in Q3. And I would add that the situation of the MAX, I mean, because we manufacture galleys for the MAX, was also one of the reason of the flattish situation in Q3. Going forward, it's a little bit premature to give any guidance for the cabin business and the interior business in 2020.

But for the Spaceflex V2, I am -- we are not late in production. We have some requirements from the customers which are not at a higher level, as you just said the level is quite low, but we are on time in terms of deliveries. So it's not a question of we just feel performance on our side.

The next question comes from Christophe Menard from Kepler Cheuvreux. Sir, please go ahead.

I had a follow up question on Spaceflex. Precisely I mean is Spaceflex also mounted on the A321 ACS? And is that reduction in volume in Q3 related precisely to what Airbus described yesterday? That was the first question. Do you want me to follow-up with a second?

Yes, let’s go with the second.

The second is on the hedging. Just to come back, I may have not heard properly but I think you say that if the spot rate is between $1.10 and $1.12, you could improve the hedge rate. Is it -- as of when is this valid, 2020, 2021? Can you -- I may not have heard exactly what you said but more detail or precision on this.

Okay. I will start with the second question on hedging to close this point as quick as possible. I did not mention a specific time frame. I just -- it's a general answer saying that if spot conditions continue to be good with current rate between euro and dollar, I guess that, as we have today at $1.18, if spot rates continue to be either $1.10, $1.12, at some point you will have some improvement. And you know that we take a step by step approach in the improvements of the hedge rate as we have clearly annual approach. So I guess this is somewhere that we will disclose at the end of the year, when we have a better view on 2023 as we have just started the hedging of 2023. So we think it will be positive. When? It’s still a question.

Christophe on your question on Spaceflex, I know that Airbus disclosed yesterday that they were a bit late in production on some units. Again, the only thing I can tell you is that we are on time with the delivery of our products. If today the requirement is for less products, we deliver less. We don't have an industrial impact on the Spaceflex V2 in terms of quality or lead time or whatsoever, we are on time. As Bernard said, 2018 was quite high because we were late and we recovered partially some delays we had at the time. But 2019 we are on time and we deliver according to requirement of our customers.

Your next question comes Zafar Khan from Societe Generale. Sir, please go ahead.

Yes, good morning. This is Zafar Khan. Just wanted some clarification, please, on the agreement with Boeing on the cash payment on the engines. You're saying here in the statement that if the MAX grounded to the end of the year then Boeing will give you an advance payment on the engines delivered in 2019. Just a couple of clarifications there please. Firstly, what happens if that grounding extends into 2020? Does this agreement cover that period as well? And just wanted to understand, are you delivering every engine you're making or you're stockpiling your facilities? And if you're stockpiling at the facilities, will Boeing pay for that as well?

Let me answer the last part of the question, which is more of industrial part of the question. And then we let Bernard answer of course, the cash impact on the discussions we have with Boeing and the agreements we have with Boeing. Regarding the production, we produce today at a rate of 42 airplanes a month. And we deliver 100% of our engines to Boeing, which are all installed on Boeing airplanes. So we have absolutely zero piling stock in our factory. We deliver as usual to Boeing but we are at a rate of 42 when we were expecting of course something higher than that a year ago. But the production is 100% with Boeing and sold to Boeing.

On the agreement, it’s something that was signed in September between CFM and Boeing. So, it covers for an undisclosed amount some cash for the engines already delivered. But you know that as we are only paid at deliveries, this cash is missing. And Boeing agreed to pay a portion of this missing cash. That’s it. So it only covers part of the cash missing in 2019. And I would say that it doesn't change the picture of the grounding of the MAX as it regards the impact on our free cash flow. It's good but it's limited.

So as I understand it, you get part payment on delivery and then the balance when Boeing delivers the aircraft. So what you're suggesting is that the -- historically….

Yes. I will start it again. Usually we are paid for the engine first with some prepayment. And then when aircrafts are delivered, we get a percentage of what Boeing gets from the airlines. So as aircrafts are not delivered, we are not paid since the grounding of the MAX. So the agreement with Boeing is just to say, “Okay, guys, you don't have the cash today because we don't deliver engines and we don't receive prepayments from the airlines but we will in a way give you some part of that ahead of what you should -- you could have received and that you will receive in 2020.” That's all.

The next question comes from Harry Breach from MainFirst. Sir, please go ahead.

Good morning, Philippe, Bernard and everyone. Can I just ask a couple of questions. Maybe firstly, just while we're talking a little bit about LEAP-1B, I think yesterday on GE’s call, they said that we will continue to see in the fourth quarter an acceleration of LEAP-1B shipments in anticipation of the MAX return to service. So I just wanted to check with you. Is there any acceleration of LEAP-1B production in the fourth quarter as the CFO of GE appeared to be saying yesterday or is there a misunderstanding somewhere? And secondly just on LEAP-1B, I think I -- thinking about earlier on this year, given the relatively elevated numbers of spare engine shipments in the early years of the program, there was some anticipation that you might be able to encourage LEAP-1B customers to bring forward their spare engine purchasing. So just to clarify, I think the comments in answer to Dr. Khan’s question, presumably you're shipping more than just rate 42 aircraft per month in LEAP-1Bs because presumably there’s still spare engine shipments at a reasonable rate. And then moving completely away from LEAP-1B for a minute, just Aircraft Interiors, actually, can you give us any sense of the book-to-bill at Aircraft Interiors, whether that has continued to be above 1? I think you said for the second quarter and first quarter that book-to-bill has moved above 1. And the refurbishment market historically has been particularly important for seats. Can you give us some sense of whether your refurbishment orders are helping to sort of fill any productions gap coming up in the 2020, 2022 timeframe?

Thank you, Harry. Do you want to answer the first part of the question on the LEAP?

Yes, on LEAP-1B there is no acceleration between Q3 and Q4. We continue to ship the equivalent of 42 aircraft a month in terms of engine. Maybe you were referring to an increase versus Q4 last year because indeed the amount of production isn't the same as it was last year, The Q3, Q4 no acceleration.

Harry, we have no requirements on Boeing to accelerate deliveries of LEAP-1B in Q4 at least as of today, I mean if EFA gives a green light, I don’t know in a day or two, maybe Boeing will come back to us. But as of today, no acceleration. We are completely in line with the requirement of Boeing to produce these 42 airplanes per month. Regarding the Aircraft Interiors, book-to-bill is still slightly above 1 in interiors but we see in terms of seats and refurbishment a reduction that is in front of us in terms of sales as we said in September for the second part of 2020 and 2021 which is the consequence of the non-operability that Zodiac had with Boeing and Airbus in 2017 and the beginning of 2018. You know that when we bought the company, I had to go to Boeing and to Airbus and get the green light to be authorized again to be proposed for refurbishment and for new sales. So it is a situation that is going to last another 18 months. In terms of prospects, when we look at the bright side of it, we have today a lot of new airlines, new potential customers, new prospects, who like our products and who like our performance, because today in terms of performance, we are on time at the level of quality requested by my customers and at a price which is competitive. So, we are back into the loop. We are back into the competition. But with the business class seats, you know Harry, it takes some time, because the engineering phase is at least 18 months even for refurbishment, then you have to go through industrialization and production. So you cannot really deliver a new product with less than two years. So there's a hole, not a big hole, but there’s a reduction in sales and all the news I have in front of me in the seats is going to remain where it is today. And the latest decision of some customers didn't help. The fact that, for example, Emirates decide to cancel their A380, where we are the supplier of the business class seats on the A380, it’s not good news. Even if we do everything we can to get the replacement of the A380 and supply Emirates with their new aircraft, it's going to take a bit longer. It's just a question of timing. I am not worried at all in terms of our interior business. On the way we do the improvement, on the way we put it back on track. But the timing based on our customers is not something we master. It is something where we need to be sometime a bit more aggressive in terms of cost reduction in order to meet the targets we gave you.

Just on the LEAP-1B spares, presumably you're still shipping 1B spares.

We do ship 1B spares according to the orders we receive from airlines. Yes, of course. Yes. Bernard, you want to….?

Yes. And from that point of view, we may have some increase in the shipments of LEAP-1B spares in Q4 versus Q3. But for the installed 1B, it's going to be flat. But for spare engines, we will have more shipments in Q4.

The next question comes from Andrew Humphrey from Morgan Stanley.

Just a couple from me. One is coming back to this mix issue in the civil aftermarket business. I mean, sorry to come back to it. But if you had single-digit growth in maintenance revenue and double-digit growth in spares, just arithmetically, the mix must be getting richer and spares consumption must be increasing. So can you tell us whether that's the case? What's driving it? If that's kind a like-for-like shop visit number? Or if you're seeing some pre-buying or buying from maintenance shops who are maybe stocking up on legacy spares? And the second point is -- or the second question I'm sorry is, we're obviously seeing some headlines over the last few days highlighting a potential large IndiGo order, which I assume would give visibility for the next several years on the A320 side. Has that affected your thinking at all about any potential production increases on that side of things?

Let's start with the second question on IndiGo. As you know, IndiGo was a large customer in 2010, 2011 of the A320neo and replaced their first batch of order with our competitor. Then they came back in discussions with Airbus at a later stage an ordered a second batch of 150 aircraft and a third batch of 130 aircraft. We have been awarded at the Airshow last June, the order for the second and the third batch. So we have an order today from IndiGo for 150 plus 130. So 280 aircraft. IndiGo is, from what I heard, is negotiating or just negotiated a new order for Airbus, so an additional 300 aircraft. We have not yet started discussions with IndiGo regarding the selection of the engine. They are not in a rush because these airplanes are coming -- are going to come after the end of the first batch and the second and the third batch. So we see there's a bit of time in front of us. And we have, of course, not negotiated anything with IndiGo at this stage regarding the first batch of 300 aircraft. More generally, as you may know from the discussions you may have had with Airbus yesterday, we have today an agreement with Airbus until 2022 regarding the quantity of engines that CFMI with the LEAP-1A must supply to Airbus. I heard yesterday that Airbus wants to potentially discuss an increase -- an additional increase of production of LEAP. We are welcome to discuss, and we will see with our supply chain if this potential additional interest is something feasible enough. We have not yet discussed with Airbus, so I cannot tell you what is the requirement -- potential requirement and, of course, what will be the reaction of our supply chain, both internal but also external.

Okay. On civil aftermarket, Andrew, maybe the missing part of what we explained that our spare part increase is a mix CFM56 and high-thrust engines and what was maybe a bit more dynamic in Q3 with high [precision pump]. That's why it's completely consistent with what we said in general, CFM56 shop visits. So I reiterate that for civil aircraft market sales are growing double-digit, services is growing mid-single-digit and for spare part there was a mix between CFM56 and high-thrust engines’ part of our share in some GE's programs.

We have questions no further questions.

So thank you. Thank you very much. Thank you all for attending this call. And we wish you a nice day and nice weekend for the ones who are going to start tonight. Thank you very much.

Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.