General Electric is forging ahead with international expansion of its growing engine overhaul business, with deals agreed in the last few days to take controlling stakes in the Malaysia Airlines (MAS) engine- overhaul unit and Brazil's CELMA repair centre.
Under an agreement understood to have been signed between MAS chairman Tajudin Ramli and GE boss Jack Welch in New York, the US company will take a majority 70% share in the carrier's Aircraft Engine Repair Operations (AERO) unit.
As part of its recent restructuring, MAS has been in discussion with GE and Pratt & Whitney to develop AERO, which has been turned into a separate company within the airline group. GE has also shown interest in expanding in the Asia/Pacific region, and there has been talk of investing in a joint venture in China.
Once the deal is finalised, the aim is to increase the amount of work going through AERO's under-used Subang Airport plant, expanding its technical base and seeking new markets including India and China. AERO focuses on major overhauls for CFM International CFM56s as well as Pratt & Whitney PW4056, PW4168 and PW125 engines.
GE has also announced that it will take a 74% stake in CELMA, the Brazilian overhaul operation, which was privatised in 1991. GE Engine Services already held a small 9.7% interest, but will now develop the plant as a "centre of excellence" in South America.
Celma's sales are expected to be above $160 million this year, about half of, which comes from overhauling P&W JT8Ds, although other work includes a range of civil and military engines, including the CFM56.
GE has targeted overhaul and repair as a central part of its business. The GE Engine Services unit, which includes spares supply, now achieves annual sales of around $2 billion.
Source: Flight International
