Guy Norris/CINCINNATI
CFM International is predicting a significant slow-down in new orders for 1999 and 2000 , to levels possibly 50% below last year's intake.
At the same time, the General Electric/Snecma joint venture is having to achieve record production levels to meet the demand from massive orders placed in the past two years.
CFMI president Gerard Laviec expects orders for the year to be "between 600 and 800 engines", compared with 1,324, valued at $6.6 billion, in 1998 - the company's best year for commercial orders. "If we do 800 it will be excellent," he adds. "There is another downturn coming."
The continuing economic gloom in Asia is the reason for the bleaker long-term outlook, but the short-term picture is dominated by the fact that "there are no more big competitions of the size of British Airways or TACA of South America", says Laviec.
Despite this, he says: "There are newcomers in terms of leasing companies." Potential business still in competition, or in final negotiations, involves Bouillion, CIT and International Lease Finance, while airline customers include Spanair and SAS, the latter planning an order for Airbus A340-300s.
Overall, says Laviec, CFMI is in good shape to handle the downturn, most of which is affecting widebody sales rather than the single-aisle market. The company holds commitments for about 7,000 engines, 3,400 of which are firm orders.
In production terms, CFMI is facing its biggest year yet, with more than 1,100 engines due for delivery. Production is expected to drop to about 1,030 in 2000, with a further decline planned for 2001.
To cope with this year's extra demand, CFMI is opening a separate CFM56-7 line at General Electric's Durham engine plant in North Carolina. The line will run for this year only, and is due to produce 200 engines.
The temporary expansion of Durham coincides with a "volume reduction" in widebody engine work on the CF6 and GE90 lines, mainly because of the drop in orders from Asian airlines.
Source: Flight International
