GE Aerospace has revised its 2024 forecast for LEAP engine deliveries, projecting a 10% decline compared to 2023. This marks the third revision this year, as the company grapples with ongoing supply chain issues and production delays. The main factors behind the reduced production are raw material shortages and operational bottlenecks in downstream engine assembly.
Impact on LEAP Engine Deliveries
In the third quarter of 2024, GE Aerospace delivered 1,029 LEAP engines, a 12% decrease compared to the same period in 2023. The largest impact occurred in Q2, with material shortages and delays at airframers slowing production. However, Q3 saw a recovery with a 23% increase in deliveries, reaching 365 engines. Despite this improvement, the figures remain 6.2% lower than in Q3 2023.
Turbine Blade Shortage and Production Solutions
A critical challenge for the LEAP-1A engine is the shortage of high-pressure turbine (HPT) blades, particularly for the Airbus A320neo family. To address this issue, GE Aerospace has designed a new, simplified HPT blade, which will streamline production. The new blade is already in production and is expected to be certified soon, with larger-scale deliveries anticipated in 2025. This solution will alleviate some of the bottlenecks faced by the company.
Financial Outlook and Positive Profit Forecast
Despite the setbacks in LEAP engine production, GE Aerospace has raised its full-year operating profit forecast for 2024. The company now expects operating profits to range between $6.7 billion and $6.9 billion, up from previous estimates of $6.5 billion to $6.8 billion. This optimistic outlook is driven by strong demand for maintenance, repair, and overhaul (MRO) services and improved product pricing strategies. GE Aerospace’s Q3 profits surged to $1.9 billion, up significantly from $333 million in the same period in 2023, mainly due to asset sales after the company’s separation from General Electric.
Steady Growth in Defense Segment
While LEAP engine production faces ongoing challenges, GE Aerospace’s defense segment performed well in Q3 2024, with an 8% increase in engine deliveries. The segment, however, showed no year-on-year growth compared to the previous year.
Future Plans for LEAP Engine Deliveries
Looking forward to the fourth quarter, GE Aerospace is optimistic about ramping up LEAP engine deliveries. The company expects supply chain improvements, coupled with the new HPT blade design, to stabilize production. Additionally, GE Aerospace will continue shipments to Boeing, which has resumed production of its 737 Max aircraft. These efforts should help meet the rising global demand for LEAP engines in the coming years.
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