Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
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GE sees 2,500 LEAP engine deliveries by 2028, enough for more than 1,000 A320neos and 737 MAXes
Larry Culp, CEO of GE Aerospace. Credit: GE Aerospace.
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By Scott Hamilton
Feb. 24, 2025, © Leeham News: CFM International plans to deliver 2,500 LEAP engines by 2028, enough to power more than 1,000 Airbus A320neos and Boeing 737 MAXes plus spare engines in a single year.
CFM is the 50-50 joint venture between GE Aerospace and Safran. The 737 exclusively uses the LEAP. The A320neo family splits its powerplant business between CFM and Pratt & Whitney’s Geared Turbo Fan engines. Between the MAX and a portion of the A320neo engines, CFM has a solid majority of the market share for the mainline single-aisle aircraft sector.
CFM is the brand for the CFM56 and LEAP, but GE and Safran benefit from the aftermarket business. Between the two engines, the maintenance, repair, and overhaul business is big and profitable.
Larry Culp, CEO of GE Aerospace, spoke at the Barclays investors conference on Feb. 20.
“There’s no question that from an aftermarket perspective, LEAP on top of CFM56 is going to keep us very busy,” Culp said. “We haven’t been particularly good at calling the outlook here because we’ve undershot the reality with the CFM56 the last couple of years.”
Culp said that GE continues to believe that it’s got several years of growth ahead. “We probably don’t see an apex until probably the 2027, 28-ish time period, and then we’ll see a gradual fade with the CFM56.
“I think we’re still talking about 2,000 shop visits at the end of the decade. We’ll see if we’re right or wrong on that, but that’s our current view. I think our partners at Safran have in effect echoed that recently at their own earnings call.”
GE FY and Q4 2024 Earnings Power Above Consensus Driven By Services While LEAP Makes Durability Strides
By Chris Sloan
January 23, 2025 © Leeham News: Today, GE Aerospace reported a strong beat on its first full-year and fourth-quarter results as a standalone public company. Softer LEAP deliveries were more than offset by services.
“GE continues to demonstrate what a high-quality company can produce in a healthy aerospace environment – and that the aero aftermarket is far from dead,” said a Vertical Research Partners analyst report. Nearly eight years since LEAP’s EIS, the engine’s durability and reliability are beginning to catch up with fuel efficiency gains that continue to beat and exceed operational expectations. The world’s largest engine, the GE9X, is progressing toward next year’s launch under the wing of the world’s largest twin, the Boeing 777X.
Overall, demand continues to outstrip supply. The company touted orders for more than 4,600 commercial and defensive engines led by big LEAP-1B wins from American Airlines and El Al for 737 MAXs, GEnx-1B campaign victories for Royal Jordanian and British Airways 787s, and new GE9X orders from China Airlines. The entry-into-service of the first LEAP-powered Airbus A321XLR was another highlight. Supply chains and productivity, though still challenged, showed meaningful improvement powered by the engine maker’s so-called “Flight Deck lean operating model.”
Earnings: Pay closer attention to the supply chain than to the OEMs
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By Scott Hamilton
Jan. 23, 2025, © Leeham News: Earnings season begins today. Among the companies followed by LNA, GE Aerospace and Hexcel report today. RTX and Boeing report next week. ATI and Spirit AeroSystems follow the week after. Other suppliers follow then.
Airbus doesn’t report until Feb. 20. Rolls-Royce reports on Feb. 27.
The manufacturers draw the headlines, but LNA found long ago that the supply chain often provides better information to draw conclusions about the future than listening to the OEMs. All it takes is one supplier to fall down on the job to muck up the works for the OEMs.
That’s not to say listening to the OEMs is not important. Clearly, it is. But there’s just no getting around it: the credibility of many of the OEMs is damaged. Airbus hasn’t hit its production ramp up targets in years. Quality control suffers. And deliveries are consistently late.
Steven Udvar-Hazy, executive chairman of the board for Air Lease Corp, says that every single Airbus aircraft, 250 of them, has been late since 2017. That’s long before the pandemic began in March 2020, which caused such disruption continuing to this day. Airbus was still delivering A320ceos during 2017 and 2018, which didn’t have engine issues.
Boeing’s credibility speaks for itself. It doesn’t matter that it has a new CEO. Until Boeing starts performing, anything it currently says is hope, not performance. Post-strike delivery recovery will be an important indicator of Boeing’s performance in the essentially truncated fourth quarter and January.
Suppliers often discuss information on their earnings calls that provides a better understanding of production rates at the OEMs and where downstream issues are or are emerging.
2025 remains another year for recovery in commercial aerospace
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By Scott Hamilton
Jan. 6, 2025, © Leeham News: Don’t look for any dramatic new product launches in 2025.
Nor should you expect any dramatic news, absent global upheaval of some kind.
This year is going to be yet another year dominated by recovery. Recovery from the COVID-19 pandemic, which officially ended in 2022. Recovery by the supply chain. Recovery for Pratt & Whitney’s nearly decade-long problems with its Pure Power GTF engines supplying the Airbus A220, A320 family and Embraer E2 jets. Recovery by Airbus from its production and delivery delays. Recovery by Boeing from its series of self-inflicted crises, now beginning the sixth year.
There is just no getting around the fact that the commercial aerospace industry isn’t a smooth-running industry. It’s a long way from 2018, when all sectors were running smoothly. There is still a long way to go to recovery.
Here’s LNA’s take on what’s to come this year.
“What’s past is prologue.” –William Shakespeare.
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By Scott Hamilton
Dec. 16, 2024, © Leeham News: A new airplane from Airbus or Boeing is years away.
Engines drive whether a new airplane program makes sense. Technology just isn’t “there” yet. In any event, Boeing can’t afford to fund a new airplane program even if it wants to. Furthermore, until its stored inventory of 737s and 787s are cleared, or mostly so, production rates are back to 2018 levels, debt is substantially reduced, and profits and cash flows return, Boeing is mired in recovery from the past. Addressing the future must wait.
Airbus has no incentive to rush into a new airplane program, even if engine technology was available. Its backlogs extend into the 2030s, and it can’t meet the current demand. Production is mired in delays for the A320 and A350 families.
Both companies, and Embraer, remain adversely affected by supply chain parts delays.
Airbus CEO Guillaume Faury previously said he doesn’t see the company moving forward with a new airplane until 2035-2040. Additional insight into the company’s thinking came last month at the Aviation Forum 2024 in Munich, where vice presidents of Airbus’ propulsion and new programs departments outlined what’s ahead.
GE Posts Mixed Q3 Earnings: Strong Earnings with LEAP Shipset Declines and Further 777-X Delays
By Chris Sloan
October 27, 2024, © Leeham News: GE completed its second quarter as a pure play aerospace play, announcing Q3 2024 earnings with positive revenue, profit, sales growth, and services coupled with headwinds from overall reduced engine deliveries of 4%, impacts to the GE-9X program from the Boeing 777-X’s latest delays, and the all too familiar supply chain constraints. Growth in services and pricing power provided a boost.
“Our recent wins and wide bodies and narrow bodies built on our considerable backlog of $149bn,” said GE Aerospace Chairman and CEO Larry Culp. Recent commercial campaign wins include narrowbody orders from lessor Avolon, which ordered 150 LEAP-1A engines to power 75 A320/321neos and announced widebody commitments from EVA Air for four GEnx-powered 787s and Qatar’s order for 40 GE9X engines to power 20 777s. The propulsion provider, however, is guiding towards a 10% decline in commercial engine deliveries year-on-year. Markets punished GE with an 8.5% drop in its stock price by mid-morning trading.
3Q Earnings reports kick off this week
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By Scott Hamilton
Oct. 21, 2024, © Leeham News: Third quarter earnings reports kick off this week. The most anticipated call will be The Boeing Co.
Boeing previewed a big loss for the quarter on Oct. 11. On Oct. 15, it filed a registration statement with the US Securities and Exchange Commission (SEC) for $25bn in equities, debt, and other securities—money that’s badly needed as it bleeds cash. It also filed another SEC document for a “supplemental” $10bn line of credit. This is in addition to a previous $10bn credit agreement.
Coupled with the $10bn in cash, Boeing potentially has up to $55bn in liquidity.
With the quarter’s loss already pre-announced and the new $25bn liquidity plan filed with the SEC, much of the suspense for Boeing’s earnings call is over. Also on Wednesday, the company’s largest union, the IAM 751 workers, vote on a new contract offer to end a strike closing in on its sixth week. Further color about CEO Kelly Ortberg’s “reset” plan for the company will be closely watched.
Boeing’s earnings call is Wednesday at 10:30 am EDT. The press release will be issued before the stock market opens. The union vote will be announced Wednesday evening.
In addition to Boeing’s earnings call this week, RTX (parent of ailing Pratt & Whitney) and GE Aerospace announce their earnings on Tuesday at 8:30 am EDT and 7:30 am EDT, respectively.
RTX results continue to be dragged down by PW’s continuing technical challenges with the Gear Turbo Fan engines that power the Airbus A220, A320neo and Embraer E-Jet. GE faces a drag on late deliveries and time-on-wing issues with its LEAP engines that power the Boeing 737 MAX and A320neo. GE is also affected by all the production turmoil and IAM strike at Boeing.
Germany’s MTU Aerospace reports on Thursday as well. MTU is a supplier to PW and GE. Safran reports on Friday.
“Hyper focus on reliability and durability out of the gates”
By Scott Hamilton
THE CFM Open Fan engine could be at least 20% more fuel efficient than today’s CFM LEAP and P&W GTF, CFM partners say. Credit: CFM.
Sept. 11, 2024, © Leeham News: GE Aerospace and Safran advance on the CFM RISE Open Fan engine with an overriding goal: “Our customers really want us to be hyper-focused on reliability and durability out of the gates.”
GE and Safran are developing a potentially game-changing engine and marketing it via the 50-50 joint venture, CFM International. The entry-into-service goal is 2035.
Customer demand for reliability and durability “out of the gates” is understandable. Engines produced by CFM, Pratt & Whitney and Rolls-Royce disappointed Airbus and Boeing customers operating the Airbus A320neo family, the Boeing 737 MAX and 787 and now the Airbus A350. Durability and/or technical issues plagued the CFM LEAP, Pratt & Whitney Geared Turbo Fan (GTF), Rolls-Royce Trent 1000 and now the RR Trent XWB-97. The giant GE9X engines on the Boeing 777X also suffered technical problems during the long, extended flight testing.
Operators protested as on-wing time fell short of promises. 787s, A220s, A320neos, and to a lesser extent Embraer E195-E2s were grounded as engines components failed, MRO shops backed up (displacing routine overhaul requirements on older engines) and new-production engines were diverted to replace those on grounded aircraft.
The CFM LEAP, GE and Safran promise, will provide a 20% reduction in fuel consumption and emissions. But the radical technology of an Open Fan gives airlines, lessors and even Boeing pause.
GE and Safran say they are progressing through development of the 35,000+ lb thrust engine but there is a lot of work to do to make it ready for service and give customers confidence.
Customer interest in Open Fan increasing, says GE
By Scott Hamilton
July 25, 2024, © Leeham News: GE Aerospace advances testing and market information with its RISE Open Fan engine, which officials say is the best hope for reducing carbon footprints in the next decade.
RISE includes Open Fan, compact core, hybrid-electric systems, and alternative fuels technologies and research.
During GE’s 2Q2024 earnings call on July 23, CEO Larry Culp said GE continues to mature these technologies. “[We’re] moving from component-level evaluations to more module-level tests. For example, with our partner Safran, we’ve demonstrated the aerodynamic and acoustic performance of the Open Fan design with more than 200 hours of wind tunnel tests.
“Additionally, we’ve announced a new agreement with the US Department of Energy to expand supercomputing capabilities, which will further advance Open Fan design,” he said. “The Open Fan is the most promising engine technology to help the industry reduce emissions designed to meet or exceed customer expectations for durability and deliver a step change in fuel efficiency.”
GE held its earnings call during the bi-annual Farnborough Air Show. The timing was awkward; due to Securities and Exchange Commission regulations about sharing information in the 30 days before a call for analysts and shareholders, GE skipped the usual press briefing in advance of the show.
Solid start for stand-alone GE Aerospace despite cuts to LEAP output
By Tom Batchelor
Apr. 23, 2024, © Leeham News: GE Aerospace enjoyed a “solid start” to 2024 with double-digit growth across orders, revenue and operating profit, the engine maker said as it published its Q1 results – the first since becoming a standalone aerospace company.
The Ohio-headquartered supplier reported “significant profit and cash growth” and raised its full-year forecast following the recent spin off of its aviation and energy businesses.
Aerospace orders grew by 34%, to $11bn, with revenue up 15%, to $8.1bn, helped by pricing, spare parts volume, and increasing deliveries in widebody and defense.
That pushed operating profit to $1.5 billion, an increase of 24%. Operating profit margins reached 19.1%, up by 140 basis points.
In its updated forecast for the full-year 2024, GE Aerospace said operating profits were expected to climb to $6.2-6.6 billion, up from the $6-6.5 billion that was listed in earlier guidance. Read more