November 12, 2003
WASHINGTON DC -- In ceremonies here with U.S. and Chinese government leaders, GE Aircraft Engines (GEAE) signed a formal contract with the Chinese AVIC I Commercial Aircraft Co. Ltd. (ACAC) to supply GE engines for China's new regional jet aircraft.
GEAE and Chinese officials have been working on the details of this long-term definitive agreement since late 2002, when ACAC selected GEAE's new CF34-10A engine to power China's ARJ21 regional jet, a new aircraft now under development and scheduled for flight-testing in 2006.
ACAC and GEAE envision a potential market for 500 ARJ aircraft over the next 20 years. This represents a potential engine value to GEAE of approximately $3 billion.
At the signing ceremony, David Calhoun, president and chief executive officer of GEAE, joined members of China's National Development and Reform Commission, and the U.S. Department of Commerce. "The ARJ represents one of the most important aviation collaborations between GEAE and the growing Chinese aviation industry," Calhoun said.
Fueled by a dramatic rate of economic expansion, China will build nearly 100 airports in the next seven years. This will result in a sharp growth in feeder traffic into China's major airports. Growth in Western China should stimulate demand for the ARJ, which is uniquely suited for the region's hot, high-altitude airports.
GEAE and ACAC are now collaborating on integrating the CF34-10A engine into the ARJ aircraft, which is in the design phase. In the production phase, the CF34-10A will be sourced from global suppliers, most of which are based in the United States.
GEAE is already a substantial engine supplier to greater China. Engines produced by GEAE and CFM, a 50/50 joint company of Snecma of France and GE, power more than 450 aircraft ordered, or delivered, to airlines in greater China.
GE Aircraft Engines, a division of General Electric Company (NYSE: GE http://www.ge.com), is the world's leading manufacturer of jet engines for civil and military aircraft, including engines produced by CFM International, a 50/50 joint company of Snecma of France and GE. GEAE manufactures gas turbines, derived from its jet engine programs, for marine and industrial applications. In addition, GEAE provides comprehensive maintenance support through its GE Engine Services network worldwide. Visit GEAE online at http://www.geae.com.