After almost three years of continuous declines, General Electric expects record aircraft engine revenues of $12 billion for 2004, representing a dramatic return to the strong growth before 2001.
Figures released to analysts during the Farnborough air show by GE Transportation president and chief executive Dave Calhoun indicate that the resurgence is tied to big increases in military and commercial business over the past 12 months. The forecast follows a relative low point in GE's revenues, which bottomed out at $10.7 billion in 2003, down from $11.1 billion in 2002 and $11.4 billion in 2001.
Calhoun says the defence business, primarily spares and some new engine work, comes on top of consistent military business growth of around 10% a year for the past four years. GE now has 19,000 military engines in regular service. The ongoing military business growth is tied to increased defence spending, and greater US military aircraft utilisation in support of operations in Afghanistan and Iraq.
The commercial business is growing on the back of the surging use of CFM56-powered aircraft, particularly the Airbus A320 and Boeing 737 families, as well as the revival of CF6-powered aircraft and the growth of the GE90 fleet. Spares and new engine sales are fuelling the growth, says the company, which has around 15,000 commercial engines in service, of which 10,000 are CFM56 variants. Overall, GE predicts it will have 25,000 civil engines in service by 2013 compared with just 5,000 in 1990.
Work to sustain the growth will also continue across the board, says GE, pointing to the potential dangers of "cherry picking" technology to support new engines and technology in specific thrust categories. The company says research and development spending at the rate of around $1 billion a year since 2001 will continue "at least through 2005", when spending is expected to rise even more to support development of the GEnx engine for the Boeing 7E7.
Future spending also includes further development of the CF34 regional jet powerplant, and the GP7200 with Pratt & Whitney for the Airbus A380, as well as upgrade packages for the CFM56. Rising fuel prices have led to renewed market interest in the latest -3 and -5 upgrade kits for this engine, says GE.
GUY NORRIS / LOS ANGELES
Source: Flight International
