GE Aerospace announced on Friday its plan to invest over $1 billion in the next five years to expand its global maintenance, repair, and overhaul (MRO) facilities, aiming to reduce turnaround times for customers.
The growing demand for after-market services has been driven by a resurgence in travel and a shortage of new planes due to production and engine issues, compelling airlines to keep older jets operational longer.
However, persistent shortages in labor, parts, and raw materials have made it challenging to meet this increased customer demand.
As industry leaders prepare to gather at the 2024 Farnborough Air Show in England next week, engine repair delays are expected to be a major topic of discussion.
Limited MRO shop capacity has become a significant bottleneck for the global airline industry, with some airline CEOs considering these delays a more pressing issue than production problems at Airbus and Boeing.
GE Aerospace aims to reduce overall turnaround time at its repair shops by 30% compared to last year. The investment plan includes adding more engine test cells and advanced technology at its facilities.
Earlier, the company committed to investing over $650 million this year in its manufacturing facilities and supply chain to boost production.
In March, it also announced plans to increase investments to reduce turnaround times, though it did not specify the dollar amount at that time.
The majority of the funds will be allocated to MRO facilities for LEAP engines, which power Airbus and Boeing narrowbody aircraft. GE co-produces these engines with France’s Safran through their CFM International joint venture.
“Our customers are experiencing strong air travel demand,” said Russell Stokes, head of GE Aerospace’s commercial engines and services.
“We are investing…so we can meet their growing needs and keep their planes flying safely and reliably,” he stated.
Post-pandemic, turnaround times at engine repair shops increased by 35% for legacy engines and over 150% for new-generation engines, according to Bain & Company.
The firm reported that it currently takes airlines two to three months to secure an MRO slot.
GE Aerospace, which became an independent company this year, holds a dominant market share in narrowbody jet engines and a strong position in widebodies.
Over 70% of its commercial engine revenue comes from parts and services.
The company plans to spend $250 million on upgrades this year, including opening a new facility near Cincinnati, Ohio, equipped with technology to detect chemical anomalies in metal parts, similar to methods used to identify forged artwork.