GE, stung by Boeing pullback, pitches for new business with Airbus2 min read . Updated: 20 Feb 2020, 11:01 AM IST
- GE is one of the biggest suppliers for both Boeing and Airbus
- The MAX grounding has cut into the company’s cash flow
General Electric Co. is looking for new business from Airbus SE, as the engine maker’s other big customer, Boeing Co., retrenches.
GE is in talks with Airbus to design and sell an engine variant for Airbus’ latest wide-body, called the A330neo, according to people familiar with the matter. The discussions come in the wake of Boeing’s decision to cut back production of that plane’s rival 787 Dreamliner, according to these people.
The interest at GE in pitching for Airbus business comes amid a major shift in the aviation industry’s global supply lines, largely due to the prolonged grounding of Boeing’s 737 MAX. The single-aisle jet is the latest variant of Boeing’s most popular airliner. It was grounded last March after two deadly crashes caused in part by glitches in its flight-control systems.
Late last year, Boeing temporarily halted production of the jet as it awaits Federal Aviation Administration signoff to fly it again. The stoppage has hit suppliers, many of whom have laid off staff or issued profit warnings.
GE is one of the biggest suppliers for both Boeing and Airbus. The MAX grounding has cut into the company’s cash flow.
As previously reported by The Wall Street Journal, the engine maker has increased production of engines for the Airbus A320neo, a rival to the 737 MAX, helping to offset the effect of the MAX production halt.
GE is now trying to position itself as an engine supplier for the European plane maker’s bigger jets as well. Currently, GE’s GEnx engine competes with Rolls-Royce Holdings PLC’s Trent 1000 for the 787 Dreamliner. Boeing has outlined plans to decrease output of that jet from 14 a month, to 10 a month, amid generally weaker demand for big jets.
Faced with that shortfall, GE is now talking to Airbus about making a variant of the same engine for the A330neo, according to these people. Airbus executives are enthusiastic, these people say, because a second engine option for the plane might make it more attractive to a wider basket of airline customers.
GE said that while it doesn’t comment on specific discussions with plane makers, “we continuously work to identify opportunities to add value for our customers and to assess introduction of new technologies into our existing engines."
London-based Rolls-Royce is currently the only engine option on the Airbus jet. A Rolls-Royce spokeswoman said the company is “very happy with the performance" of its engine for the aircraft.
An Airbus spokesman said the company is “always in talks with our engine-makers about new technologies," adding that its current Rolls-Royce engine on the A330neo is a “good and solid offering."
GE’s interest in providing engines for the A330neo also suggests a level of confidence by the engine maker in the sustainability of that aircraft. The Airbus jet is being hit by the same sluggish sales for bigger aircraft as Boeing’s 787. Airbus is reining in production of the model to 40 this year, from 53 last year.
The A330neo’s prospects brightened considerably after Boeing— amid its MAX crisis—decided to rethink plans for an all-new aircraft that would have competed with the Airbus jet. Dubbed the NMA—for New Midrange Airplane—the aircraft would have been Boeing’s first “clean-sheet" design since the 787. Boeing has said it plans to go back to the drawing board to rethink those plans, but only after it has resolved the crisis surrounding its 737 MAX.
This story has been published from a wire agency feed without modifications to the text.