CFM rakes in $2 billion with another $200 million due today
CFM International is having a bumper airshow, announcing more than $2 billion of contracts by the end of Tuesday and with more deals worth potentially another $200 million due to be signed today.
Its largest deal at the show (so far) is the $540 million contract signed on Monday with Indonesian carrier Lion Air, which ordered CFM56-7Bs to power 40 Boeing 737-900ERs. This was closely followed by another with Bogota, Colombia-based Avianca, which chose the -5B version to power 33 Airbus A319s and A320s in an order worth $500 million over the life of the engine.
On Tuesday afternoon, Afriqiyah Airways chose the CFM56-5B to power a fleet of Airbus A319s and A320s in a $190 million deal. A few hours later, CFM president and CEO Eric Bachelet and Vladislav Filev, chairman of Russia’s S7 Airlines, inked in a $510 million deal for -5Bs and -7Bs for its 25 new Airbus A320s and 10 Boeing 737s.
The new business comes on the back of $7 billion-worth of deals signed up by the 50/50 GE/Snecma partnership by the end of May. Bachelet reckons the year will end with “at least 1,400 new orders” for the CFM56. This would make 2007 the third best year in the company’s history.
On top of the new engines business, CFM has secured contracts worth around $1.5 billion to supply upgrade kits, which improve performance and economy of the CFM56-3s and -5s powering earlier Boeing 737s and A320s.
To cope with the explosion of orders, the consortium has increased production rates to record levels, to 1,280 in 2007 from 1,060 last year. CFM said it expects to raise rates even further in 2008 and 2009, to around 1,400 engines.