Farnborough Air Show

GE Wrestles with Business Case for Mid-market Aircraft

 - July 17, 2018, 4:17 AM
GE Aviation CEO David Joyce expressed reservations about the business case for Boeing's proposed NMA during the Farnborough Air Show.

Some two weeks after submitting a proposal to power Boeing’s New Mid-market Aircraft (NMA), GE Aviation CEO David Joyce continues to reserve judgment on the business case for his company’s participation. Speaking on July 16 at the Farnborough Airshow, Joyce instead confirmed that GE and CFM partner Safran have agreed to propose a CFM design, even if the required engine thrust slightly exceeds the 50,000-pound limit the partnership’s remit would typically allow.

Meanwhile, GE continues to “wrestle” with the size of the market it believes exists for the 220- to 270-seat NMA, a consideration that will largely determine whether or not a dual-source arrangement for engines would be viable.

“The reality is it has to make economic sense,” said Joyce. “I would say we’re still wrestling with what the size of the market is, and that’s a big question because people feel great when you launch, but your shareholders don’t feel great until it’s successful.”

“That program’s got to turn into a program like the GEnx or Leap for us so these big investments come home," he added. "And I would say we’re not completely reconciled right now, but we’ve not done all our homework...We’re working really hard to triangulate on what the market is and what it means, in terms of how many variants they offer on the airplane–and then what does that mean in terms of how we size the engine.”

Although Boeing has said it won’t decide whether or not to launch the NMA until next year, Joyce said he expected some feedback on what he called the first round of proposals before then.

Finally, while two potential engine suppliers for the NMA remains a possibility, Joyce did voice a definitive conclusion that GE would not participate in a three-way arrangement. “That’s just a recipe for disaster,” said Joyce.

Joyce downplayed any effects to GE Aviation that might arise from the parent company’s decision to spin off its healthcare division and divest its stake in oil services conglomerate Baker Hughes, proclaiming “business as usual.”

“I would say the changes in GE, if anything, unlock more capability out of GE Aviation," he said. "I don’t feel any constraints at all relative to what’s happened in the last year. I feel just the opposite.”