GE Aerospace to Invest $1 Billion in MRO Capacity

Engine manufacturer GE Aerospace has announced a plan to invest over $1 billion to expand its maintenance, repair, and overhaul (MRO) facilities. This significant investment is aimed at accommodating the expected increase in aftermarket services as airlines look to extend the lifespan of their aging fleets.

The five-year investment will fund the addition of new engine test cells, equipment, and advanced inspection technology at the company's MRO sites around the globe. This initiative is part of GE Aerospace's strategy to reduce turnaround times at its service centers by 30% for its clients.

A substantial portion of the investment will be allocated to facilities servicing LEAP engines, which are used exclusively on Boeing's 737 MAX aircraft and also power Airbus' A320neo jets. GE Aerospace had previously reduced its LEAP output forecast for 2024 but increased its earnings guidance due to heightened demand for spare engine parts and MRO services.

The company, which manufactures LEAP engines through its joint venture with Safran Aircraft Engines, CFM International, reported a 9% increase in first-quarter deliveries to 614 units. However, these figures fell short of expectations due to supply chain bottlenecks, including shortages of raw materials.

This year, GE Aerospace will invest $250 million in facility upgrades, including the completion of its new Services Technology Acceleration Center (STAC) near Cincinnati, Ohio. Scheduled to open in September, the STAC will focus on developing new engine service technologies and processes, which will be implemented across the company's MRO sites.

The STAC will also introduce GE Aerospace's new method for detecting microstructural variations in metal engine components. This technology promises to improve the ability to determine whether engine parts should be repaired or replaced, potentially easing supply chain issues by reducing the need for new parts and minimizing aircraft downtime.

In response to ongoing disruptions in the aerospace supply chain, which have not fully recovered from the Covid-19 pandemic, GE Aerospace announced in March a $100 million investment from a broader $650 million commitment to enhance its domestic suppliers' production capabilities.