GE Jet Engine Backlog in China Climbs to $5B

23 January 2008

GE Aviation and CFM International, GE’s 50/50 joint company with Snecma (SAFRAN Group) of France, said that combined jet engine orders in China in 2007 surpassed 420 engines, valued at more than $1 billion at list price, spanning engines for regional jets to jumbo jet airliners. The value of the GE engine backlog in China has grown to approximately $5 billion (list price).

Air travel growth in China, where 44 new airports are scheduled for construction in the next five years, continues to outpace airplane supply. In 2007 alone, domestic airline traffic grew by 18% in China, while international airline traffic grew 11%.

In late December, Kunpeng Airlines selected 50 firm, 50 option ARJ21-700 regional jets from China’s AVIC1 Commercial Aircraft Co., Ltd. (ACAC). The ARJ21, powered by GE’s CF34 engine, is being developed for Chinese and export markets. To date, ACAC has firm orders for 85 ARJ21s, and sees a market for up to 850 ARJ21s in 20 years, representing a potential to GE of more than $4 billion in engine revenues. The aircraft’s first flight is slated for the first half of 2008.

(The annual revenue of AVIC1 exceeded 100 billion yuan (US$13.77 billion) for the first time in 2007, up 24% year on year, sources with company recently told Xinhua.)

The best-selling airliners in China are the single-aisle Airbus A320 and Boeing 737 families. CFM International powers more than 600 single-aisle Airbus and Boeing aircraft in service with Chinese airlines, and has nearly 400 more single-aisle aircraft on order. The CFM engine backlog in China approaches 900 engines.

While GE powers about 27 twin-aisle jumbo jets in the Chinese airline fleets, it has been selected for another 70 jumbo jets on order, including 44 787 Boeing Dreamliners with the GEnx engine.

GE Aviation or CFM International now operate facilities in Beijing, Shanghai, Guanghan, and Xiamen. In addition, GE Aviation’s purchase of jet engine components in China reached $284 million in 2007, a 100% growth in three years.