Aircraft manufacturers may be backburnering their next-generation narrowbody projects, but suppliers such as GE Aviation Systems are still working on future technologies for when the market recovers.
The potential industry downturn could not have come at a better time for Tier 1 systems and technology provider GE Aviation Systems.
The former Smiths Aerospace business, acquired by the US engine-maker just over a year ago, is not relishing the economic slowdown. But the company but is very conscious that its declared mission to “fly for less” is really coming into focus in both its key civil and defence markets.
John Ferrie, president of GE’s Aviation Systems, says: “Its about less cost as well as less weight, less noise and less emissions. We are seeing a lot of interest in our technologies where we have put a lot of effort to reduce expenses. We need to help find cost-effective upgrades to engines and avionics to keep existing fleets flying for less cost. Anything we come up with, we do.”
“The feeling we get from the airframers is that they will keep pushing on,” Ferrie says. “There was a challenge keeping up with demand. There is a lot of uncertainty in the market at the moment particularly in the US. With oil at $140 a barrel, US commercial aviation faces a really tough period and who knows where it is going to go. At this price it wipes out profits and takes the buying power down. Airlines providing services at marginal costs won’t be able to carry on. But what we are sensing is that airlines in other parts of the world will continue to buy new aircraft.
Ferrie continues: “We are cautious rather than pessimistic. Anyone who has been involved with the industry known how cyclical it is, how quickly it goes down and how quickly it rises again. We are on the balls of our feet and watching very carefully.”
He is equally watching developments in the defence business, which accounts for almost half of the company’s activities. “There are huge similarities between civil and military they just talk a different language,” Ferrie says. “There are budget restrictions and the same needs exist to keep existing aircraft flying. We are helping by back-fitting the technology that goes into modern aircraft and finding ways to maintain them. Our job is to optimise they work, understand their mission needs and come up with support solutions.”
The Smiths business was bought by GE for a reported $4.8 billion in May 2007. Just over a year on and Ferrie is convinced the parent company is seeing value. “There is strong growth built into the forward plans,” he says. “The cost benefits [that were identified for the acquisition] are now beginning to appear. The synergies that we talked about are being delivered. There is an enhanced bottom line and a top line that is growing.”
Culturally, the two businesses are blending well. “It doesn’t happen overnight,” Ferrie says. “We are well on the road. My commitment was to drive and manage the integration and ensure that the customer relationships were not disrupted.”
Where the systems business has benefited has been in the access to the R&D functions and resources within GE and the extended networks in customers. “We were always strong in the development of our technologies but there is a huge difference now. There is a greater depth of technologies and a deeper understanding of the issues. We didn’t have the resources and the backing to bring some of our ideas to market. Now we do.”
The company is looking at many new ideas, “really we are studying new ways to fly,” says Ferrie. “We are looking at how to re-architect the systems.” An insight to how the technologies are developing can be seen in the GE Pavilion (Chalet P1-7). “There are a number of multi-media exhibits that give a real flavour of the future, he says.
For GE Aviation Systems, the future is happening now. While the airframers are putting the next generation narrowbodies onto the back-burners, companies such as GE are working on the “quantum leaps” that the systems and technology needs to make to merit the investment and to meet the airline needs. “We are working on the architecture now,” says Ferrie. With recent successes on the new Gulfstream G650 GE is also reviewing its involvement in the business and general aviation sectors.
“This is a very exciting part of the business,” says Ferrie. “It is not an area that we have traditionally been involved in, but there has been incremental development in the new aircraft. We are working with Embraer as well, so it is very much a new area of focus for us.”
Ferrie sees the growth in the GE Aviation Systems coming from across the globe. Already the company is stepping up its manufacturing involvement in China and is outsourcing significant engineering work to third parties in India.
“We invested in a manufacturing plant in China for engine components, that plant doubled as we added airframe structures, it is now set to double again, We are transferring more work there, There are economic advantages of course, but we are also seeing a high standard of engineers trained in the west and supporting the industry there.
“It does mean there will be fewer jobs in manufacturing and engineering here but there will be high level engineering at the top end. There is a growing shortage of engineers in the UK and the US and there is a clear ageing population in the industry.
“I think there are huge opportunities. We go out and talk to schools and colleges, arrange scholarships and take on apprentices. I tell people if they want to make a contribution to sustainability then they should go into engineering and then to make a real impact, go into aerospace.”