Financing and investing in engines - Airfinance Journal Engines event Slides/GE.pdf · $80.0MM CF6-80C2 PW4000 RB211-524 B787 ... TR EN DD ATA. GE –Aviation 16 ... Based on sample

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GE - Aviation

Financing and investing in engines

September 19, 2006

Outline

• The equipment of choice … world-class reliability and residual value

• New technology via R&D … shared across product portfolio

• Major effort to certify engines and upgrades … minimizes risk

• World-class support … Field Service, diagnostics, etc.

• Service adds another dimension

• Non-type certificate holder parts

GE – Aviation2

GE Proprietary Information Subject to restrictions on the cover or first page

GE – Aviation3


Installed base growing … 8% CAGRGE, CFM and EA together comprise majority of fleet

8,125

13,109

18,549

27,456

35,642

31%

43%

55%

64%

71%

1995 2000 2005 2010 2015

EA

Engines in service

CFM*

GE

Portion of world-wide jet fleet

CFM, CFM56, and the CFM logo are trademarks of CFM International, a 50/50 joint company between Snecma and General Electric Company

GE – Aviation4


-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

Dec-97 Dec-99 Dec-01 Dec-03 Dec-05

GE and CFM departures

GE and CFM events

(Cumulative averages)

105% increase

54% decrease

Delivering product reliability every day …

• GE and CFM engines … 655 million flight hours and growing– A takeoff every 2 seconds

– Delivering beyond expectations

• Increasing departures … decreasing events


GE – Aviation5


… with higher residual value

• Driven by maintenance cost, reliability, commonality, fuel burn & customer preference

• Expect trend to continue with GEnx … set to power next generation twin-aisle aircraft

Source: The Aircraft Value Reference, October 31st 2005 Issue 29, Volume 1

$58.3MM$56.8MM

CF6-80C2 PW4000

$94.5MM$89.9MM

$80.0MM

CF6-80C2 PW4000 RB211-524

B787

B747-8

2005 Residual Value767-300ER HGW (2000 vintage)

2005 Residual Value747-400 870K MTOW (2000 vintage)

GE – Aviation6


Technology investment … family additions

*GP7200 developed by GE/P&W Engine Alliance**HF118 developed jointly by 50/50 JV between GE & Honda

Total Engines R&D spend U.S. $M

800

400

0 ’01 ’02 ’03 ’04 ’05 ’06E

1,200

Service ‘05

EMBRAER 190 CF34-10

ARJ21 CF34-10

Service ‘07

Boeing 777-300ER GE90-115B

Service ‘05

Service ‘08

Boeing 787 GEnx

GE/Honda** HF118

Service ‘06

Airbus A380 GP7000*

Service ‘04

747-8 GEnx

Service ‘09

Highest R&D commitment inhistory … $7.1B since 2000

GE – Aviation7


3D aerodynamics

Features

• New blade shape … better airflow

• Optimized turbine clearances

Benefits

• 1.6% lower fuel burn … better range/payload capability

• Longer time-on-wing … better durability

GE – Aviation8


GE90-76B/85B

777-200

GE90-94B

777-200ER

GE90-115B

777-200LR, -300ER

GP7000

A380-800

1 2 34

5

787 & 747-8

GEnxnxnxnx

Using our experience to reliably delivery the next generation of mature but advanced technology

Advancing technology … on a state-of-the-art engine architecture

19952000

20042006

2008

GE – Aviation9


GE90-76B/85B

777-200

GE90-94B

777-200ER

GE90-115B

777-200LR, -300ER

GP7000

A380-800

1 2 34

5

787 & 747-8

GEnxnxnxnx

Advancing technology … on a state-of-the-art engine architecture

19952000

20042006

2008

chevron nozzle, composite case, advanced HPC3D Aero

HPT S1B, combustor

Continuing to refine GE90 architecture, creates opportunity for technology backflow

GE – Aviation10



Tech Insertion

•Improved fuel burn

•Lower maintenance costs

•Lower noise & emissions

~2013+CFM56 Technology Evolution

CFM56-7

CFM56-5B/P

Generations 1& 2 Generation 3 Generation 4

CFM56 technology … delivering customer value and service opportunity

CFM56-3 CFM56-5A

CFM56-5CCFM56-5B/3CFM56-7B/3

LEAP56

LEAP56

•Rotating composites

•High stage loadings

•Low emissions

•Advanced acoustics

1984

Infusing technology into previous generations via upgrade programs

GE – Aviation11


Enhanced DurabilityHP Compressor•New blade aero design• Improved EGT margin• Lower fuel burn

Combustor• Lower NOx (up to 20%) • Improved durability

HP Turbine• Low shock airfoil• Improved cooling

LP Turbine Nozzle• Improved cooling• Lower scrap rate

CFM56-5B & -7B Tech Insertion


GE – Aviation12


New engine or upgrade … rigorous certification process employed

• Multiple engines tested– Ingestion … water, ice,

hail, etc.

– Emissions

– Stress test

– Endurance

– Over-temperature

– etc.

• Tests run on the ground and in-flight

Emissions

Ingestion

Flight Test

GE – Aviation13


New engine or upgrade … rigorous certification process employed

• Multiple engines tested– Ingestion … water, ice,

hail, etc.

– Emissions

– Stress test

– Endurance

– Over-temperature

– etc.

• Tests run on the ground and in-flight

Stress Test

GE – Aviation14


Every part rigorously tested and examined

• 14,000 flight cycles run before GE90-115B entry into service– Equivalent to 17 years of

airline operation

• Maturation programs– 25,500 flight cycles run

to date on GE90

– 25X today’s fleet leader

GE – Aviation15



Diagnostics and prognostics …

• Actively monitoring 10,000 engines … and growing– Evaluating key engine

parameters 24/7

– Constantly improving detection algorithms

• Prevented 60 events last year … 46 events YTD

• Standard product support offering from GE and CFM

E G T H D M v s . F L IG H T _ D A T E T IM E

0

1 0

2 0

3 0

4 0

5 0

6 0

0 9 -J a n -2 00 1 29 - J a n -2 0 0 1 18 - F e b -2 00 1 10 -M a r-2 00 1 3 0 -M a r -2 0 0 1 19 - A p r-2 0 0 1 0 9-M a y -2 0 0 1 2 9-M a y -2 0 01 18 - J u n -2 00 1 08 - J u l- 2 00 1 2 8 -J u l- 2 0 0 1

F L IG H T D A T E T IM E

E GTH otD ayM arg ina tT ak eo ff

E G T H D M

T R E N D D A T A

GE – Aviation16


Backed with GE technical expertise

• 250 Field Service Engineers

• 450 dedicated Customer & Product Support Representatives

• 24/7 Customer Support Center … US & China

• Technical Training Schools ... US, China & France

• Global Operators Conferences

GE – Aviation17


Terre Haute, IN

Strother Field, KS

On-Wing SupportSMCentersCincinnati, OH

Dallas, TX

Unison/ElanoDayton OH

Veresegyhaz, Hungary

GEES HQs + Shops Cincinnati, OH

GE Aviation Materials Dallas, TX

Accessory Services, Grand Prairie, TX

Prestwick, Scotland

On-Wing SupportSMCentersHeathrow, EnglandLuton, England

GEES Malaysia + On-WingSupportSMCenters

Kuala Lumpur, MalaysiaCelmaPetropolis, Brazil

GEASOSingapore

On-Wing SupportXiamen, China

Unison IndustriesJacksonville, FLNorwich, NYRockford, IL

Saltillo, Mexico

On-Wing SupportSeoul, S. Korea

Serving global customers via our network

ATSSingapore

ATI* Mentor, OH (HQs + Shop)

Central European Engine Services*Warsaw, Poland

NORDAM Europe Blackwood, Wales

ATI* Derbyshire, England

ATI* Compton, CA

GE/EGAT*Taipei

GE-Japan Yokoshibamachi, Japan

MTU **Germany

KLM **Netherlands

JAL **Japan

** Service alliance

* Joint venture

GE-owned

Standard Aero **Canada

Air France **France

Cardiff, Wales

IHI**Japan

GE – Aviation18


Spare engine leasing

Diagnostics

New parts

Used parts

Technology upgrades

Repair

A new approach … OnPointSM

Services that perform. Solutions that save.

The basic product suite OnPoint Solutions …

• Beyond the basic suite

• Feature long term commitment between GE and customer

• Address each value element– Scope and value of service

– Risk transfer

– Payment method

– Commercial terms

AssetManagement

Material

Overhaul

On wing supportMaintenance

GE – Aviation19


GE-serviced engines stay on wing longer …

GE can produce longer time-on-wing via …

• OEM workscope

• OEM material

• OEM repairServiced by GE

65% of

1st run TOW

Serviced by others

44% of

1st run TOW

Time-on-wing(Normalized to time to 1st SV)

Based on sample of CFM56-3 engines serviced at 2 GE shops and 3 non-GE shops

45%+

more TOW

CFM, CFM56, and the CFM logo are trademarks of CFM International, a 50/50 joint company between

Snecma and General Electric Company

GE – Aviation20


441,153

3,957

9,767

19,653

1988 1992 1996 2000 2004

Addressing concerns … non-type certificate holder parts

• PMA moving from low-tech to high-tech, safety-critical parts– Significant potential to impact engine reliability and operability

• GE responding– Working with FAA/EASA to address approval, certification & continued airworthiness concerns

– GE external policy … GE Instructions for Continued Airworthiness do not apply

– GE internal policy … remove non-TCH parts at overhaul

Number of non-TCH part approvals(per FAA database, Commercial Transport Turbines)

New trend …safety-critical parts

GE – Aviation21


Summary

• The product of choice … setting the standard for reliability

• Maturing new technologies … infusing into legacy fleets

• Employing rigorous certification process … new engines, new technologies and upgrades

• Enhancing product support with real-time monitoring and global engineers

• Bringing added benefit thru Service

• Engaging regulatory agencies and customers with non-TCH parts concerns

Documents

Financing and investing in engines - Airfinance Journal Engines event Slides/GE.pdf · $80.0MM CF6-80C2 PW4000 RB211-524 B787 ... TR EN DD ATA. GE –Aviation 16 ... Based on sample