Growing Demand for GE Engines

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Evendale-based GE Aviation, an operating unit of General Electric Co. (GE), will benefit from an order by Delta Air Lines Inc. (DAL) for 40 Bombardier Aerospace CRJ900 regional airplanes powered by CF34 engines made by GE Aviation. The company also has an option of buying 30 additional aircraft.

The firm engine order is valued at $320 million, excluding the additional 30-aircraft option. Delivery of the engines will start in 2013. CF34 engine would help to revolutionize regional jet aviation.

These planes will be operated by Delta Connection, which operates regional jets across Wilmington and Atlanta. This order would allow the airline to replace a less efficient, single-class, 50-seat aircraft with new two-class, 76-seat aircraft.

GE Aviation has sold more than 2,100 CF34-8 engines to power Montreal-based Bombardier’s CRJ700 and CRJ900 aircraft and Brazilian Embraer’s 170/175 aircraft. Rotating parts for the CF34 engines are manufactured at GE Aviation’s facility at Castle Hayne and the final assembling is done in Durham.

Tubes, ducts and manifolds for GE’s engines are manufactured in a factory of 200 workers in Dayton. In the Dayton region, parent company General Electric has 1,400 employees and in the greater Dayton region, GE Aviation employs more than 1,200 people.

GE Aviation recently acquired two precision manufacturing companies, Morris Technologies and its subsidiary Rapid Quality Manufacturing based in Cincinnati, Ohio.

General Electric primarily competes with United Technologies (UTX), Precision Castparts Corp. (PCP) and Honeywell Inc (HON). General Electric currently carries a Zacks #3 Rank, which implies a short-term Hold rating on the stock.

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