On April 23, Larry Culp, the first chairman and CEO of GE Aerospace, which had just been spun off from General Electric Group to become an independent manufacturer of aero engines and aircraft parts, announced at the first-quarter earnings conference that the company had achieved double-digit revenue and profit growth in the first quarter, as well as significant increases in profits from two key businesses.
In the first quarter of 2024, GE Aerospace demonstrated strong commercial vitality and growth. The company's operating income increased 15 percent to $8.1 billion, while operating profit increased nearly 25 percent to $1.5 billion, and service revenue under the Engine Long Term Hour Warranty (RPFH) increased 12 percent. This strong financial performance is not only due to the strong recovery of the global civil aviation market, especially from Asia, but also reflects the strong competitiveness and product strength of the divested GE.
CEO Culp expressed satisfaction with the company's start, emphasizing: "Our team has worked tirelessly on a global scale to not only achieve double-digit growth, but also to further expand margins. These results are a testament to our commitment to our customers and our relentless pursuit of technological innovation and operational efficiency. ”
After the spin-off, GE Aerospace has grown rapidly and exceeded expectations. The company forecasts full-year 2024 profit of $6.2 billion to $6.6 billion, up from its previous estimate of $6.0 billion to $6.5 billion. It is expected to achieve the goal of operating profit exceeding $10 billion by 2028.
Culp said the company's focus in 2024 will be on "securing deliveries rather than just pursuing growth in new orders", with engine deliveries increasing by 9% compared to the first quarter of 2023, with 367 LEAP series engines delivered. Nevertheless, he noted, "These deliveries did not fully meet our expectations, and this is largely due to ongoing supply chain challenges." ”
In 2023, Safran International, a joint venture between GE Aerospace and France's CFM, delivered a total of 1,570 LEAP series engines to customers around the world, and is expected to produce and deliver more than 2,000 LEAP engines in 2024, most of which are LEAP-1A and Boeing 737MAX LEAP-1B engines for the Airbus A320 family, a year-on-year increase of about 25%.
GE Aerospace has pioneered the construction of an aero-engine supply chain management system with Internet technology, which can track more than 80% of materials and parts in real time at 15 factories around the world. Through the application of this advanced supply chain management system, the company has greatly improved the transparency and operational efficiency of material and information flows.
GE is now producing an average of 4.3 LEAP engines per day, a speed increase that significantly shortens the production cycle. In the future, the company plans to further increase production to 5.5 units per day. At the same time, the turnaround time for the entire range of power units has been reduced to no more than 90 days. These optimizations and improvements not only improve production efficiency, but also further improve customer satisfaction, while strengthening GE Aerospace's position in the industry.