Services grab over 1/3 of $17B Farnborough deal tally

With the giant Farnborough Air Show coming to a close outside of London this weekend, the focus continues to be on signs of an airline industry comeback — and the services component of the deals inked this week. On the industry front, Bloomberg News struck an optimistic note in its story today, reporting that “Airbus SAS and Boeing Co. won 237 jetliner orders worth $28 billion at this week’s Farnborough Air Show, more than three times the number announced in Paris a year ago, prompting some executives to say the global slump is over.” As Bloomberg points out, “orders were dominated by the resurgent aircraft-leasing industry,” with GE Capital Aviation Services (GECAS) — with a fleet of over 1,800 owned and managed aircraft in 75 countries — jumping in by ordering 100 planes spread across both manufacturers. Overall, GE and its partners signed more than $17 billion in deals at Farnborough — with $6 billion of that total coming from contracts for critical services such as maintenance, diagnostics and overhauls. Software-driven advances in services also turned heads, with GE announcing that its myEngines digital services technology was being launched with Chilean carrier LAN — one of the largest airlines in Latin America. It’s a maintenance suite of tools that even comes with an iPhone app, as AviationWeek explains in the video below, shot at GE Aviation’s Farnborough booth.

MyEngines digital services will cover LAN’s entire fleet and allows technicians to quickly review critical engine data and make real-time decisions regarding their fleet, even remotely. For example, the software tracks overhaul progress; allows for urgently needed materials to be researched and ordered; monitors the health of critical engine parameters; and helps engineers make decisions by accessing engine specs and verifying compliance with service bulletins.

As we noted in our story on Monday about Farnborough — which is held every two years and alternates with the Paris Air Show — GE and its partner companies landed $9 billion in engine and service deals on just the first day. The partner companies include CFM International, which is a 50/50 joint company between GE and Snecma, and Engine Alliance, which is a 50/50 joint company between GE and Pratt & Whitney.

By Wednesday, the total had shot up to over $16 billion — and a $1 billion services deal with UPS announced today brings the tally to $17 billion for the week. UPS signed a 10-year deal for what’s known as an OnPoint solutions agreement with GE Aviation for 142 engines in its fleet. OnPoint services may include overhaul, on wing support — which is when maintenance teams are dispatched anywhere in the world to work on an engine while it’s still with the aircraft — parts, repairs, technology upgrades, engine leasing, and integrated systems support and diagnostics.

Good sign: At the air show, Eihad Airways, the national airlines of the United Arab Emirates, finalized its purchase of 70 GEnx-1B engines to power its 35 Boeing 787 Dreamliner jets along with a multi-year OnPoint solution services agreement.

Aviation also announced that its OnPoint Fuel & Carbon Solutions is the newest technology to be added to GE’s ecomagination portfolio of more energy efficient products. The proprietary software helps airlines — which typically see 30 percent of their expenses chewed up by fuel — identify and track operational improvements that can reduce their fuel spend by an average of three percent. GE launched the software earlier this year with Brazil’s GOL Airlines.

David Joyce, President of GE Aviation, talks about the industry outlook in the CNBC interview below. His comments begin at about the 2-minute mark.

* Read more about myEngines on AviationWeek
* Read “Farnborough Air Show: $9B for GE & partners on Day 1” on GE Reports
* Read more Aviation stories on GE Reports