GEAE nets more deals at air show

Thursday, September 10, 1998

The Cincinnati Enquirer

GE Aircraft Engines didn't have to look far Wednesday for its latest big order at the Farnborough International air show. GE Capital Aviation Services (GECAS), the aircraft leasing arm of GE Capital, placed engine orders valued at $600 million with GEAE and CFM International, GEAE's partnership with Snecma of France.

Both GEAE and GE Capital are part of General Electric Co. GE Engine Services also announced a five-year, $100 million contract to provide engine maintenance and repair to Evergreen International, an Oregon-based air freight transport company. The work will be done at GE Engine Services' Nantgarw, Wales, center. But the biggest news out of the third day of the British air show was a potential $5 billion order from United Parcel Service, which operates a hub in Louisville, for Airbus Industrie A300 cargo jets.

The order for 30 firm and 30 optional A300-600 jets was the Atlanta-based freight hauler's first with Airbus. All of UPS's current fleet of 216 aircraft were supplied by either Boeing Co. or the former McDonnell Douglas Corp., now part of Boeing.

UPS said engines for the wide-body A300s, which can carry 109,000 pounds of cargo up to 2,500 miles, will be supplied by either GEAE or Pratt & Whitney, a unit of United Technologies.

Airbus announced firm new orders for airplanes with a list value totaling $6.7 billion in the first three days of the show, along with options on more planes with an asking price of $4.5 billion. Boeing's firm orders came close to $5.2 billion -- with about another $1 billion in options, a spokesman said.

The new GEAE orders include an order valued at $200 million to supply CF6-80C2 engines to power 12 Boeing 767 extended-range jets, an aircraft order valued at $1.27 billion. GECAS will place the wide-body jets with its airline clients between 1999 and 2002. GECAS also said it was ordering up to 40 Airbus A320 family narrow-body jets, valued at $1.8 billion, to be powered by CFM56 engines. That engine order was valued at $400 million. GECAS said it has more than 90 CFM56-powered A320 family jets in service or on order. The new A320s are set for delivery in 2003.

Also at the air show, Springdale-based CFM International, which is on track for a record year with more than 1,036 firm engine orders valued at $5 billion through August, said it was launching a three-year effort called Project TECH56 to acquire and develop new engine technology for the future. CFM's record for new orders was 1,280 received in 1996.

The new CFM technologies, which observers said are designed to counter rival Pratt & Whitney's effort to develop a new more efficient geared-fan engine, include a more aerodynamic, lighter-weight fan, simpler compressor and a lower emission combustor.

Gerard Laviec, who this month starts his second three-year term as chief executive of CFM, said the TECH56 was designed to keep CFM on the cutting edge.

"The market is changing, and CFM is developing the technology that will meet those requirements," he said in a statement.

Also, GE Engine Services, GECAS and AAR Corp., a supplier of aviation aftermarket parts, announced a new joint venture called Aviation Inventory Management Co. LLC (AIMCO) to provide aircraft repair parts, exclusive of engine parts, on a lease basis.

Business Headlines for Thursday, September 10, 1998

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