GE Accelerates In The Aftermarket.jpg GE Aviation

GE Accelerates In The Aftermarket

U.S. engine manufacturer achieved service revenues of $16.6 billion in 2017.

Buried deep inside General Electric’s 224-page annual report are some revelatory figures about the US manufacturer’s aviation business.

In 2017 GE Aviation posted revenue of $27.4 billion or about 4% better than the previous year. So far, so unspectacular, but of that total, $16.6 billion came from services.

This means the aftermarket now drives 61% of GE Aviation’s revenues and significantly outweighs its sales of new engines.

This is somewhat surprising given that GE Aviation’s main competitor, Rolls-Royce, is often regarded as the more aggressive OEM in the aviation aftermarket.

However, despite decent growth of Rolls-Royce civil aerospace services last year, its share is roughly where GE Aviation’s services business was two years ago--at 53% of total revenue.

Since 2015 GE’s services sales have grown 29%, compared with 15% for Rolls-Royce, which had services revenue of £4.2 billion ($5.8 billion) in 2017.

Examining growth over the last two years is relevant because GE and Rolls started to revamp their service offerings in 2015, with both putting greater emphasis on alternatives to long-term, full-service, cost-per-flight-hour maintenance deals.

GE streamlined its products into four pillars: TrueChoice Flight Hour; TrueChoice Overhaul; TrueChoice Transitions; and TrueChoice Material.

Rolls-Royce introduced SelectCare for operators of older engines as well more flexible variant of its flagship TotalCare product, and, since then, has also launched LessorCare.

It is, though, difficult to make precise comparisons, since GE includes defence in its figures for original equipment and services sales, with military supply and support accounting for about a quarter of GE Aviation’s business.

The U.S. OEM credited its services growth in 2017 to “a higher commercial and military spares shipment rate, as well as higher prices.”

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.