Farnborough Air Show: $9B for GE and partners on Day 1

General Electric

The Farnborough International Air Show — one of the world’s most iconic global aviation events — took off July 19 with Dubai-based Emirates airlines kicking-off a week of deals. Held every two years outside of London, it alternates with its rival across the English Channel, the Paris Air Show, and not only brings together buyers and sellers (1,000 exhibitors from 38 countries are at this year’s air show) but it’s the place to show off the latest in aviation technologies. On the first day, GE Aviation and its partners landed engine sales and service deals worth over $9 billion. The partner companies include CFM International, which is a 50/50 joint company between GE and Snecma, and Engine Alliance, which is a 50/50 joint company between GE and Pratt & Whitney.

Future flight? It wouldn’t be an air show without a glimpse into what the future of air travel might look like. Airbus today released images at Farnborough showing what a plane might look like in 2050, “or even 2030 if advancements in existing technologies continue apace,” they note. The plane has a U-shaped tail and engines partially embedded into the plane itself.

In one deal with Emirates, the airline is ordering 30 Boeing 777s powered by GE90-115B engines — which are part of GE’s ecomagination portfolio of more fuel-efficient technologies. The engine order, including spare engines, is valued at $2 billion list price. An additional 12-year services agreement for maintenance and overhaul is worth more than $1 billion.

Emirates also placed a deal with the GE joint venture Engine Alliance for GP7200 engines to power 32 Airbus A380s in a deal, including a service agreement, worth approximately $4.8 billion. The GP7200 combines innovations from its member companies’ most successful wide body engines: the GE90 and the PW4000.

Meanwhile in other deals on July 19, China Eastern Airlines inked a $600 million engine and service deal for CFM56-5B engines to power 30 new Airbus A320 family aircraft. Chinese flag carrier Air China chose the CFM56-5B engine to power 20 Airbus A320s. That order and service deal is also valued at approximately $600 million. Also in services, Angola Airlines (TAAG) and Tripoli-based Afriqiyah Airways each signed 10-year, $50 million maintenance agreements. Brazil’s Azul airline ordered CF34-10E engines valued at more than $40 million and South America’s TRIP airline ordered the same engines in a deal valued at $17 million.

GE’s latest flight management technology is also drawing attention at Farnborough. GE Aviation, as part of a consortium of industry partners led by LFV Sweden, announced that it is now part of the “Green Connections” project, which is validating how existing technology can be better utilized to reduce air travel C02 emissions. GE’s flight management system will provide four dimensional flight trajectories — latitude, longitude, altitude and time — to predict the optimum flight paths in the project. By creating curved, tailored trajectories, planes can have shorter flight paths and use their engines more efficiently, thereby reducing fuel use and emissions.

Going fast: Also at Farnborough, GE announced that it’s ramping up production of the GEnx engine that will power the Boeing 787 Dreamliner and 747-8 aircraft, pictured above. “The GEnx engine is having the fastest production ramp-up of any commercial engine in GE’s history, with the production rate at 100 engines this year and doubling to 200 next year,” said Tom Brisken, general manager of the GEnx program at GE Aviation. GE will produce 60 GEnx-2B engines for the 747-8 aircraft and 40 GEnx-1B engines for the 787 Dreamliner at its Durham, North Carolina facility this year. Next year, GE plans to produce 200 GEnx engines, split evenly between the two models. Production is scheduled to continue at this pace through 2013 for a total of 700 engines delivered to 28 customers. In all, more than 1,300 GEnx engines are on order to 48 customers around the world.

And signaling strength in the aircraft leasing sector, GE Capital Aviation Services (GECAS) on July 19 announced an order for 40 next-generation Boeing 737-800s and an additional 60 Airbus A320 family aircraft. GECAS is the commercial aircraft leasing and financing arm of GE with a fleet of over 1,800 owned and managed aircraft with approximately 245 airlines in over 75 countries. As The Wall Street Journal (subscription required) noted in its story today about Farnborough: “Jet makers are striking an upbeat tone amid global economic uncertainty. A big reason: Airplane-leasing companies are shopping again….” The Journal reports “carriers world-wide are emerging from their worst crisis in decades, boosting demand for planes. As significant, money is returning to the aviation market.”

If you count the engines being purchased as part of the GECAS orders, the total sales figure for GE and its partners on Day 1 of Farnborough climbs to more than $10.5 billion.

Learn details about today’s deals:
* Emirates GE90 announcement
* Emirates GP7200 announcement
* Air China CFM announcement
* China Eastern Air CFM announcement
* Green Connections project announcement
* Boeing GECAS announcement
* Airbus GECAS announcement

* Read more Aviation stories on GE Reports

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