GE Aviation: Company Strategy & Performance Analysis

GE Aviation offers a range of aircraft engines and related services to military and commercial customers. The company manufactures jet, turboprop and turboshaft engines, and related replacement parts for commercial and military aircrafts. It also develops aerospace systems and equipment, which include platform computing systems, power generation and distribution products, mechanical actuation products and landing gear and engine components. GE Aviation provides repair and maintenance services for all categories of aircrafts. Its engines are used in a wide range of commercial and military aircraft, including executive and regional aircraft, fighters, bombers and surveillance aircraft, as well as marine applications. Its operations are spread across Europe, Asia, the Americas, the Middle East and Africa. It operates as a subsidiary of General Electric Co. GE Aviation is headquartered in Cincinnati, Ohio, the US.

MarketLine Premium’s company strategy reports provide in-depth coverage of the performance and strategies of the world’s leading Civil Aerospace companies. The report details company operations in key geographies and offers a comprehensive analysis of each firm’s growth strategy and financial performance. The reports benchmark company performance via key indicators, including order, order backlog, operating expense, operating income, net income, and deliveries.

Key Highlights

Constant technological improvement in products and services led to growth

GE Aviation service orders stood at US$16.3 billion in 2016, registering a growth of 19.9% from US$13.6billion in 2015 owing to the introduction of technologically advanced products and services. Overall, the company’s orders grew at a 2.9% CAGR from US$23.5 billion in 2012 to US$26.3 billion in 2016. The growth in the order backlog is attributed to the signing of new MRO and supply contracts between GE Aviation and companies like StandardAero, WestJet, Republic airways, Colorful Guizhou airlines and Lufthansa Airways.

Order Backlog

GE Aviation has considerable order backlogs, which ensure strong top line performance. As of December 2016, the company had a total order backlog of US$154.5 billion, showing an increase of 2.2% over 2015. The company’s backlog increased 2.2% from US$151.2 million in 2015 to US$154.6 million in 2016, out of which MRO backlogs increased from US$116.3 million in 2015 to US$121.3 million in 2016, owing to the growing demand for the latest technologically advanced engines leading to an increase in MRO orders. New generation LEAP engines, which feature 3D-printed fuel nozzles and parts from space-age ceramic composites, continue to drive orders for the company.

Increased shipment of LEAP engines supports segmental growth

The company’s Aviation segment revenue increased from US$24.2 billion in 2015 to US$25.5 billion in 2016, reflecting a growth of 5.3% in 2016. The increase in Aviation segment revenue is mainly due to higher services volume and LEAP engine shipments. This was partially offset by reduced equipment volume driven by a decrease in military shipments. Revenues also grew due to higher engines and services pricing. Prices also increased in response to higher material and conversion costs.

Scope

– Company Snapshot Details key indicators and rankings of GE Aviation in terms of revenue, net income, and operating income.

– Company SWOT Analysis Outlines GE Aviation’s strengths, weaknesses, and opportunities and threats facing the company.

– Growth Strategies Provides an overview of GE Aviation’s corporate goals and strategic initiatives and evaluates their outcomes.

– Company Performance and Competitive Landscape Analyses the company’s performance by geographical segment and provides a peer comparison on parameters such as revenue and market share.

– Key Developments Showcases GE Aviation’s recent corporate events and initiatives.

– ICT Spending Prediction Details how the company allocates its ICT budget across the core areas of its business, specifically hardware, software, IT services, communications and consulting.

Reasons to buy

- How does GE Aviation rank among its peers in terms of revenue and market share?

- What are GE Aviation’s main growth strategies and how successful has the company been at implementing them?

- How has the company performed since 2014?

- How has GE Aviation performed in comparison to its main competitors?

- What are GE Aviation’s strengths and weaknesses and what opportunities and threats does it face?

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