GE Announces Big-ticket Aviation Deals in China
ZHUHAI, China--19 November 2010-- General Electric [NYSE: GE], the worlds premier technology and infrastructure company, announced a series of deals and investments with major players in the Chinese commercial aviation sector at the countrys biggest aviation exhibition held in Zhuhai this week.
CFM International, a 50/50 joint venture between GE and French company Snecma (Safran group), secured four deals for engines and services with a total value of $2.1 billion with three leading Chinese carriers, namely Air China, China Eastern Airlines and the HNA Group:
- 20 CFM56-5B engines from Air China, the countrys flagship carrier;
- 30 CFM56-5B engines from China Eastern Airlines, the countrys second-largest carrier by fleet size;
- 42 CFM56-5B engines to power new A320s under HNA Group, the countrys fourth-largest airline group, with delivery due to begin in 2012;
- A long-term service agreement on maintenance of the CFM56-5B-powered HNA Group A320 fleet.
Both the Air China and China Eastern deals were first announced at the Farnborough Air Show, UK, earlier this year.
Also at the Zhuhai Air Show, Shanghai-based Commercial Aircraft Corporation of China Limited (COMAC) received one hundred launch orders for their C919 aircraft, Chinas homegrown narrow-body passenger jet. As part of these orders, GE Capital Aviation Services (GECAS), which provides aircraft leasing and financing service globally, signed a letter of intent to purchase up to 10 of the C919 aircraft. The 150-seat C919, still under development, is expected to enter commercial service in 2016. CFM International has already signed up with COMAC as the sole foreign propulsion system supplier including engine.
COMAC also signed an agreement with AVIC International for 100 ARJ21-700 regional aircraft powered by GE's CF34-10A engine. The parties will jointly market and sell these regional jets internationally.
GE Aviation capped the eventful week in Zhuhai with a Memorandum of Understanding with HNA Group to form a joint venture in the coastal city of Tianjin to provide maintenance, repair and overhaul services for GEs CF34 engines.
John Rice, GE vice chairman and head of international operations, said: China is the fastest-growing aviation market in the world. These latest investments and agreements ensure GEs long-term participation in Chinas air transportation boom.
Mark Norbom, president & CEO of GE China, said: The agreements signed this week demonstrate our consistent, long-term commitment to our airline partners in China. The decision to add C919s to the GECAS fleet shows our confidence in the commercial prospects for the aircraft and strengthens the relationship with our Chinese partners in the aviation space.
GE (NYSE: GE) is a diversified infrastructure, finance and media company taking on the worlds toughest challenges. From aircraft engines and power generation to financial services, medical imaging, and television programming, GE operates in more than 100 countries and employs about 300,000 people worldwide.
GE started doing business in China in 1906. Now all GE businesses have set up operations in China with 36 wholly owned entities and joint ventures in manufacturing, service and R&D. GE employs 14,000 people in China.
