Melrose’s GKN Aerospace inks $5bn deal with GE Aerospace for engine program
Melrose Industries PLC announces a major milestone for its GKN Aerospace Engines business with the signing of a new comprehensive agreement with GE Aerospace, a titan in the global aerospace engines market.
Significant Expansion of GEnx Program Participation
The partnership has significantly bolstered GKN Aerospace’s role in the GEnx program, where it will now have an increased share in the lucrative aftermarket phase, expanding beyond its original equipment (OE) involvement. This change promises a future of strengthened aftermarket support and an increased slice of the program’s revenue over the engine’s lifecycle.
New Agreements to Drive Cost and Emissions Reduction
GKN Aerospace is set to enhance the GEnx program with its cutting-edge proprietary technology, including additive fabrications aimed at reducing costs and carbon emissions. The agreement also integrates GKN Aerospace into GE Aerospace’s global repair network, where it will offer specialized repair services for complex engine structures.
Fan Case Production for GE Engines Secured
Under the new terms, GKN Aerospace will deliver all fan cases for several of GE’s engines, which include the GEnx, CF6, and GE90, and half of the GE9X fan case assembly, securing a life-of-program commitment.
Anticipated Financial Growth
The financial projections associated with this expanded agreement are substantial. GKN Aerospace anticipates an increase in sales estimated at around $5 billion over the more than 30-year life span of the GEnx engine, with a significant uptick in the medium term driven by aftermarket activities and the integration of GKN’s new technologies into the GE engine lineup. The short-term financial outlook remains stable with no material changes expected.
CEO’s Vision on Strategic Growth
Melrose CEO, Simon Peckham, commented on the agreement: “This agreement illustrates the unique breadth and quality of our business across the aerospace engines industry and its position as a technology leader. We very much look forward to deepening our relationship with GE.”