Exclusive: GE lifts 2014 plane engine production to meet demand

Thu Jun 13, 2013 8:49am EDT
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By Alwyn Scott

NEW YORK (Reuters) - Riding a wave of demand for new airplanes, General Electric Co's (GE.N: Quote) aviation unit said it expects to produce 3,800 commercial aircraft engines with its partners next year, up from 3,600 expected in 2013.

The forecast, due to be released at the Paris Air Show that starts next week, is up nearly 36 percent from 2010. GE delivered 3,300 engines in 2012.

The forecast shows that aircraft makers Boeing Co (BA.N: Quote) and Airbus EAD.PA are ramping up their factories to meet growing demand for air travel, particularly in Asia. It also reflects the large number of new airplanes that Boeing, Airbus and others are bringing to the market, and the need to replace older aircraft.

On Tuesday, Boeing forecast that airlines will buy 35,280 new jetliners worth $4.8 trillion over the next 20 years to keep up with passenger and cargo traffic, expected to grow 5 percent annually over that period.

GE Aviation said about 13 percent of production in 2014 will be for new products, compared with 9 percent in 2013 and 2 percent in 2010. The trend shows the growing importance of the latest plane designs to suppliers.

GE Aviation is supplying the engines directly or through joint ventures CFM International and Engine Alliance.

CFM is a partnership with Safran SA (SAF.PA: Quote) of France. Engine Alliance is a partnership with the Pratt & Whitney unit of United Technologies Corp (UTX.N: Quote).

CFM engines power the Boeing 737 and Airbus A320 families of single-aisle jets, which account for more than 24,000 of the planes in Boeing's 20-year forecast. That demand would mean more than 48,000 engines. Airbus A320s also offer the option to use an engine made by Pratt & Whitney.   Continued...

Buildings are seen reflected on the GE Building also known as 30 Rockefeller Plaza, in New York, January 22, 2010. REUTERS/Brendan McDermid