FARNBOROUGH, England - Japan Airlines has placed an order with GE Aerospace for GEnx-1B engines to power its new fleet of up to 20 Boeing (NYSE:BA) 787-9 Dreamliner aircraft. The announcement made today follows the airline's recent deal with Boeing and continues a longstanding partnership between Japan Airlines and GE Aerospace.
GE Aerospace's President and CEO, Russell Stokes, expressed pride in the enduring relationship, which dates back decades and includes Japan Airlines being the launch customer for the GEnx engine. Stokes highlighted the trust Japan Airlines has in GE's products and services as evidenced by the new order.
The GEnx-1B engine is a part of the GEnx engine family, which has accumulated over 56 million flight hours since its service entry in 2011. It is noted as the fastest-selling high-thrust engine in the history of GE Aerospace, with nearly 3,000 engines currently in service or on order, including spares. The engine is also recognized for its performance, reliability, and fuel efficiency, as confirmed by Yukio Nakagawa, Executive Officer and Senior Vice President Procurement of Japan Airlines. Nakagawa mentioned the GEnx's essential role in the airline's 787 Dreamliner fleet expansion.
Significantly, the GEnx-1B powers two-thirds of the 787 aircraft currently in operation and is compatible with approved Sustainable Aviation Fuel (SAF) blends. Its advanced design and lightweight materials contribute to reduced weight, enhanced performance, and lower maintenance costs, making it a preferred choice for long-haul flights.
Japan Airlines, together with its subsidiary, operates 53 Boeing 787s powered by GEnx engines, which recently surpassed 3 million engine flight hours. The airline's fleet also includes aircraft powered by other GE Aerospace engines, such as the CF6, GE90, CF34, and CFM56—the latter being a product of a joint venture between GE Aerospace and Safran (EPA:SAF) Aircraft Engines.
GE Aerospace is a leading provider of jet engines for commercial and military aircraft, boasting a global service network. With over 44,000 commercial and 26,000 military aircraft engines installed, GE Aerospace is actively shaping the future of aviation.
Japan Airlines, established in 1951, is a member of the oneworld® Alliance and operates a fleet of 227 aircraft, serving 384 airports in 64 countries/regions. The airline, recognized for its exceptional service, has been renewing its international long-haul aircraft with the Airbus A350-1000 since the 2023 Winter Schedule. Committed to flight safety and service quality, Japan Airlines aims to be the preferred choice for customers worldwide.
This news is based on a press release statement from GE Aerospace.
In other recent news, GE Aerospace has committed over $1 billion to expand its global Maintenance, Repair and Overhaul (MRO) facilities over the next five years, with a significant focus on accommodating the demand for CFM LEAP engines. This move is in response to the growing demand for commercial aviation services. In addition, GE Aerospace has extended CEO Larry Culp's contract until the end of 2027, following substantial restructuring, debt reduction, and cash flow increase under his leadership.
The company has also finalized the spin-off of its energy segment, GE Vernova Inc., marking a significant restructuring move. GE Aerospace is actively developing a hybrid electric engine in collaboration with NASA, aiming to equip narrow-body jets by the mid-2020s. However, it anticipates that global supply chain issues will persist into the next year, affecting both the equipment and services sectors of the business.
Analysts, including those from Deutsche Bank, maintain a positive outlook for GE Aerospace, adjusting their earnings estimates upward. The company is also exploring fuel-efficient technologies in collaboration with Safran, aiming to create engines that could reduce fuel use and emissions by 20% from the middle of the next decade. These are some of the recent developments shaping the trajectory of GE Aerospace.
InvestingPro Insights
In light of Japan Airlines' recent order for GEnx-1B engines from GE Aerospace, a division of General Electric (NYSE:GE), it's worth noting the company's financial and market performance. GE's market capitalization stands robust at $176.33 billion, reflecting its significant presence in the market, particularly as a prominent player in the Aerospace & Defense industry. This is supported by a solid revenue growth of 16.96% in the last twelve months as of Q4 2023, indicating a healthy expansion in its operations.
GE's commitment to innovation and customer satisfaction is evident not only through its product offerings but also through its financial resilience. The company's P/E ratio is at 19.1, which may be attractive to investors looking for stable growth in the industrial sector. Additionally, GE has maintained dividend payments for an impressive 54 consecutive years, showcasing its dedication to shareholder returns. The current dividend yield is modest at 0.7%, with the last dividend payment recorded on July 11, 2024.
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