GUY NORRIS / CINCINNATI
Engine maker aims to maintain output above 600, but near-term outlook uncertain
CFM International plans to deliver more than 700 engines in 2003 and expects to maintain a relatively stable production level of between 600 and 720 engines over the next four years, despite the unprecedented uncertainty in the market.
"It is a downturn, but we think we can manage," says Pierre Fabre, president of the General Electric/Snecma joint venture.
He adds: "An upturn before 2006 would be very, very unlikely." Sales last year totalled more than $5 billion, of which over a quarter - $1.3 billion - was generated by its spares and support business.
Although well down from its record-breaking peak delivery period between 1999 and 2001, when more than 1,000 engines were produced a year, Fabre says the company is on track to deliver around 717 engines in 2003. He adds: "We do not expect anything more than a 20-30 variation on this," despite the outbreak of the Iraq war.
However, he cautions that the forecast for 2004 "is more questionable, although officially we are looking at 700 plus. It is too early to firm it up, but it would be surprising for it to go below 600-650. Our forecast is to have between 720 and 600 for four years."
Fabre adds that the forecast is based on assumptions that sales of the Airbus A320 and Boeing 737 families will remain relatively steady.
To date engine sales for this year number 280, although the vast majority of this total (240) is made up of last year's large A319 order from EasyJet, which CFMI is including in this year's sales.
"If I was going to extrapolate, it will be a good year, but we're not going to get an EasyJet every quarter," he adds. By contrast, CFMI took 592 orders in 2002, a large decline against 1998, a year in which it booked more than 1,300 orders.
In marketshare terms, CFMI is also claiming recent gains in its long-running contest with International Aero Engines and the V2500 over the Airbus A320 family, with about 55% of the firm orders by airframe.
Prospects for further marketshare increases are good says Fabre, who adds that CFMI is "hopeful" that Indian Airlines is about to follow China Southern in selecting the CFM56 over the incumbent V2500 as part of new fleet deals.
Fabre also sees potential development of the engine leasing market. "It's certainly a way forward in the current financial situation, and we see it as a developing market," he says.
Irish-based CFMI subsidiary Shannon Engine Support would be ideally placed to buy and lease back equipment, he adds.
ADDITIONAL REPORTING BYMICHAEL PHELAN IN PARIS
Source: Flight International
