GE halves LEAP engine delivery growth target for 2024
By Rajesh Kumar Singh
CHICAGO (Reuters) — General Electric (NYSE:GE) on Tuesday warned that the growth in LEAP engine deliveries next year would nearly halve as its suppliers struggle to keep pace with a booming demand.
In an interview, CEO Larry Culp said the company is aiming for a 20% to 25% year-on-year increase in the engine deliveries in 2024, lower than a revised 40% to 45% annual growth this year.
Still, hitting the target will not be easy as it requires quarter-on-quarter improvements in the supply chain, he said.
«Our suppliers have work to do to continue to drive the sequential improvements,» he told Reuters. «There's no silver bullet here.»
LEAP engines, which GE produces in a joint venture with France's Safran (EPA:SAF), power the narrowbody aircraft of Boeing (NYSE:BA) Co and Airbus. However, persistent shortages of labor and parts have left the company's suppliers hamstrung.
The company said supplier delinquencies shot up 25% in the third quarter from a quarter ago. It forced GE to trim the delivery growth target for LEAP engines this year by at least 5 percentage points and push out some of the deliveries into 2024 and 2025.
A slowdown in deliveries puts a question mark over plans at Boeing and Airbus to ramp up output. It is also a setback for airlines' efforts to modernize their fleets. Carriers are already dealing with the fallout of a rare manufacturing flaw in Pratt and Whitney's popular Geared Turbofan (GTF) engines that could ground hundreds of Airbus jets in coming years.
When asked if planemakers need to review their output goals in view of the persistent supply constraints, Culp said airframers would be «paced by their slowest, their weakest supplier.»
To help ease the bottlenecks, GE has
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