Geoff Thomas

American engines giant GE is further expanding its overhaul and maintenance network by taking over Brazilian airline Varig's facility in Rio de Janeiro.

GE will own 95% of the new company - to be called GE Varig Engine Services - while the original owner will retain the remaining shares.

The new company will concentrate primarily on Varig's CFM56-3, CF6-50 and CF6-80C2 engines, although third-party customers will also be encouraged.

Speaking at Farnborough yesterday, GE president and chief executive officer James McNerney Jr says GE is concentrating more and more on offering after-sales support and service for its engines, as it helps to smooth out the peaks and troughs of the engine supply business.

"We're now in the 25-year life-cycle game and 57% of our business is in service. The acquisition of Varig's Brazilian operation is a part of this strategy," he says.

GE Engine Services is on track for a record sales year of nearly $5 billion, an increase of more than 65% over last year and more than double 1996's sales of $2.3 billion.

GE Engine Services president and chief executive officer Bill Vareschi says: "The formation of a new engine services facility with a strategic customer such as Varig affords us the opportunity to offer a tremendous service network in South America. And because of the synergies gained by our acquisition of Celma in 1996, we will be able to take advantage of this expanded service quickly and seamlessly."

GE-Celma, based in Petropolis, Brazil, is a subsidiary of GE Engine Services.

Source: Flight Daily News