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GE Aviation CEO says changes at GE no constraint for his business

FILE PHOTO: The General Electric logo is pictured on the General Electric offshore wind turbine plant in Montoir-de-Bretagne, near Saint-Nazaire, western France, November 21, 2016. REUTERS/Stephane Mahe/File Photo

FARNBOROUGH, England (Reuters) - The overhaul at U.S. industrial giant General Electric Co (GE.N) is not a constraint for its aviation arm, "in fact I feel it's the very opposite," the head of GE Aviation said on Monday.

Following a year-long strategic review, GE said last month it would spin off its healthcare business and divest its stake in oil-services firm Baker Hughes (BHGE.N), effectively breaking up the 126-year-old conglomerate.

"The changes in GE unlock if anything more capability out of GE Aviation. I don’t feel any constraints relative to what has happened in the past year - in fact I feel the very opposite," David Joyce, CEO of GE Aviation and vice chairman of GE, told a news briefing at the Farnborough Airshow.

"We don't feel we are under a lot more pressure than we were before."

Asked about Boeing's plans for a new twin-aisle mid-market aircraft, Joyce said he expected a formal decision from Boeing in response to engine offers in 2019.

Joyce said, in reply to a question, that he had not yet managed to reconcile the various views on market forecasts for the middle of the jetliner market.

The business case for potential engine manufacturers would depend on how many variants Boeing plans to offer, he said.

GE has the largest stake of any engine maker in the industry's status quo, since it supplies engines for best-selling single-aisle aircraft to both Boeing and Airbus through its CFM joint venture with France's Safran (SAF.PA).

Industry experts say that means GE has the lowest strategic interest among engine makers in supporting the mid-market project, though most expect it to take part in the program if it goes ahead - especially if Boeing only chooses one supplier.

Joyce reiterated he was open-minded about whether the program should have one engine supplier or two, but that GE would not take part if there were three suppliers on board.

GE competes with Rolls-Royce (RR.L) and Pratt & Whitney, which some in the industry speculate could co-operate on the project.

The mid-market plane would sit between single-aisle and wide-body jets and compete partly with the Airbus A321neo, the European planemaker’s largest single-aisle jet.

Asked whether the mid-market plane could damage the business case for the LEAP engine, which CFM offers on the A321neo and other Airbus single-aisle models, Joyce it would not, based on the latest proposals for the aircraft, but did not elaborate.


(Reporting by Tim Hepher; Editing by Mark Potter)