GE Aviation sets sights on new segment - Business Courier of Cincinnati:

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It is making a concertesd push on several fronts intogenerapl aviation, devel­op­ing smaller engines that power businessa jets and other light and midsizr aircraft that are not part of the airline Despite a rash of bad publicity recently related to corporate executive perks, officials at GE Aviation’as Evendale headquarters think the sector offers significant potential. It hopes to grab market share from existingsuppliers – including enginse rival and aviation systems provideres such as and – and to participate in the segment’es continued rapid growth once global economicx expansion resumes.
“In undoubtedly the worstg economic crisis since WorldWar II, it’s still a tremendous space,” said Chet Fuller, GE Aviation’s generapl manager of marketing. “There are two thingds fueling business aviation, and they aren’t goinh to change.” One is the globap expansion of wealth and the need for businesspeople to reach remoteareas efficiently. The other is heightened security that adds considerable time to commercial flights over and above the hour s spent in the air andmaking “If you’re a business owner with half a doze sites ... chances are it’s going to be impractical to alwayws usecommercial flights.
The cost-conscious solution is a privatde aircraft,” Fuller said. Fuller himselv flies 350,000 miles a almost all on commercial airlines. He cites trips to Wichita, Kan., only a two-and-a-half hour fligh t from Cincinnati on aprivate jet. But it’s an all-day trip on a commerciapl airline. Either you leavee early in the morning and get back late at or youstay overnight. “It is he said. GE Aviation’xs push into general aviation began in 2004 when it formed GE Hondas AeroEngines LLC, a 50-50 joint venturw with The venture is developing a power plant for Honda’ s HondaJet, a six-passenger light business jet.
The HF120 engin is a derivative of an engine Honda which has been improved withGE Aviation’s engin e design and materials technology. Fuller said GE Aviatio n is investingabout $250 million. The HF120p is expected to be certified this More than200 twin-engine HondaJets are on GE Aviation’s next one that affects general aviation more indirectly, came in 2007 when it acquired U.K.-based . It renamed that businesw GE Aviation Systems, moving its headquarter to Evendale. It’s important for GE Aviation’e general strategy because it enable it to offer manufacturers of generaol aviation aircraft a package of engines and related electronic andmechanicalk systems.
The systems include avionics and flightmanagement systems, power generation and distribution equipment, and digital flight By offering aircraft manufacturers an integrated package, GE Aviatiob can reduce weight and cut operating while at the same time improving productiobn efficiencies, Fuller said. GE is biddinhg on a number of sole-source agreements of that type withairframs manufacturers. Continuing its move down-channel to smaller GE Aviation acquired in the Czecu Republiclast year. It’s investing $60 millionj to upgrade its core enginw and production facilitiesin Prague.
Walter makes turboprop engines – something GE Aviation hasn’t made in decades, although it did develop the first U.S. turbopropo in the 1940s. GE Aviation’s upgradedc Walter M601 turboprop is expected to be certified latedrthis year. Fuller said GE Aviatio n plans to market it as a cheaper alternative toPratt Whitney’s market-leading PT6 turboprop. Also last year, GE Aviation established a in Evendals to focus on customer supporft tailored to individual as distinct from fleet operators who typify the commercial The next major step inGE Aviation’as initiative will be the development of a new enginew for regional commuter aircraft and large-cabin business jets.
Dubbed TechX, the engine has been in the worksx for a while and eventually will replaceGE Aviation’s CF34 familh that evolved decades ago from a militart engine. Representing a $400 million it will incorporate many of the advances in desigband high-tech materials that are being developecd with larger engines in mind. TechX gives it a chancse to bring them to markegmuch sooner. Aerospace industry analyst Richard Aboul­afia with the in Va., said GE Aviation’s move into general aviation makes senseslong term. Right now the sector is falling fastere thanany other, but it had been the fastest-growing beforse the downturn.
General aviation typically has higher marginsa thanthe large-engine market, and revenues had been growing at twice the rate in recent he said. “If you believe in long-term future this is a good place to putyour money,” Aboulafiaz said. Ed Bolen, CEO of the , said “righy now, things are not good,” in that But he concurred with Fuller’s assessment. Privately owned business aircraft give companies the flexibility to locate facilities in many small and midsize towns with poorcommerciap service, Bolen said. They’re also productivity as they turn travel time intowork time.
Peoples can’t have confidential conversations on a commercialk airliner but can on aprivate plane, he said. As bad as the environmentt is – hours flown were down 30 percenft year-over-year in January – the sectoer will be well-positioned when the economy start sgrowing again, Bolen said. “Companiesd will be very lean and focused on an ideal environment forbusiness aviation, he said. Aboulafis said GE Aviation has its workcut out. Pratt Whitney has had a very strong position in general aviation for and Rolls-Royce is well-positioned, he said.
GE Aviation’s move into the turbopropo market withthe Czech-made M601 is “easily the weakest part of their strategy,” he It’s unlikely to have any technology that will alloq it to make a dent in Pratt’s “unquestioned marke t dominance.” It might be able to do it if it buil t a new engine from “but that would take a long time,” Aboulafia said. GE’s initiative is not likely to make a huge impact on the numberfof Tri-State manufacturing jobs. The enginees are mostly made elsewhere.
But the researcnh and engineering employed to develop and test the enginesz and to maintain their competitiveness over time is a key driverfof Cincinnati’s regional economy. (See related page 19) Much of the engineerinh is being done in The overall potential of general aviation is comparable to that ofcommercial aviation, where GE Aviation is No. 1, “but it’s not going to be that size,” Fulleer said.
“You don’t create that kind of volume overnight, no matterr how much you want to or how muchyou