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GE expects lower growth in LEAP engine deliveries due to supply challenges, says Reuters.

GE Reduces Growth Forecast for LEAP Engine Deliveries Amid Supply Issues

GE Sees Slower Growth in LEAP Engine Deliveries Amid Supply Snags

General Electric (GE) has revised its growth forecast for LEAP jet engine deliveries, citing ongoing struggles within the global aerospace supply chain. The company anticipates a decrease in growth for this year and expects a further slowdown in the following year. The demand for LEAP engines, widely used in medium-haul jets by Airbus and Boeing, continues to outpace the supply chain’s capabilities.

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GE’s CEO, Larry Culp, stated in an interview that the company aims for a 20% to 25% year-on-year increase in deliveries for 2024. This projection is lower than the revised 40% to 45% annual growth anticipated for this year. Previously, GE had predicted a 50% growth in 2023 deliveries for these engines. Achieving the 2024 goal will require significant quarter-on-quarter improvements in the supply chain, which Culp acknowledges will not be easy.

“Our suppliers have work to do to continue to drive the sequential improvements,” Culp told Reuters. “There’s no silver bullet here.”

GE co-produces the LEAP engine with Safran, a French corporation, through their joint venture CFM International. However, the company’s suppliers have been facing persistent shortages of labor and parts, hampering production. In the third quarter, “supplier delinquencies” or glitches increased by 25% compared to the previous quarter. Consequently, GE has reduced its delivery growth target for LEAP engines this year by at least 5 percentage points and has rescheduled some deliveries for 2024 and 2025.

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This slowdown in deliveries raises concerns regarding Boeing and Airbus’ plans to ramp up output and represents a setback for airlines’ fleet modernization efforts. Additionally, Pratt and Whitney’s Geared Turbofan (GTF) engines, widely used in Airbus jets, are facing potential groundings due to a rare manufacturing flaw. GE has reassured its alignment with Boeing and Airbus on demand for LEAP engines until the end of 2024, emphasizing its commitment to meet customer expectations.

Addressing the persistent supply constraints, GE has deployed machinists and engineers to supplier facilities to alleviate bottlenecks. While these measures have improved output and resolved broad-based issues, the demand for aftermarket services and new engine deliveries remains strong. Culp explains that the number of required parts has been increasing and emphasizes the need for continuous efforts to meet the market’s demands.

CFM International has also provided an update on its search for unapproved parts affecting a small fraction of the previous generation of engines known as CFM56. The company reported that 145 engines were affected by the suspected sale of falsely documented parts from a UK distributor, with over half of them already removed from service.

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