Anticipating a long downturn in the airline industry, General Electric (GE) has reduced its forecast for 2002 and 2003, and says that airliner production will remain sluggish until a "modest production recovery" in 2005. GE Aircraft Engines chief executive David Calhoun says supply will continue to outstrip demand in the airline business until at least 2004, and that the troubles of carriers such as United Airlines and US Airways mean that 20% of the US airliner fleet, and 9% of the worldwide fleet, will be in or near bankruptcy for the next two years. Other parts of the GE empire are also struggling, according to GE chairman Jeff Immelt, notably its reinsurance operations which have suffered, he says, in the wake of the 11 September attacks. The company is taking a $1.4 billion charge to represent the drop in the value of its reinsurance operations, Immelt says. Another threat is the company's exposure, through its GE Capital Aviation Services aircraft financing and leasing arm, to US Airways and United Airlines woes.
Source: Flight International
