Five companies in the airlines industry and in the aircraft component manufacturing industry have been awarded a total of $125 million over a period of five years by the Federal Aviation Administration to develop aviation technologies that consume less energy, involve less polluting and emit lower noise.
The companies include General Electric Company (GE), Honeywell International Inc (HON), Boeing Company (BA), Pratt & Whitney- a division of United Technologies Corporation (UTX) and Rolls-Royce America, a company specializing in manufacturing of jet engines.
The Federal agency targets a 33% reduction in fuel consumption, a 60% drop in nitrogen emission and the lowering of aircraft noise by 32 decibels from present levels.
The large commercial aircraft sector is expected to generate most of its revenues from Asia-Pacific-Japan (APJ) and the Middle East. It is relying less on U.S. orders because of the current economic climate. However, airline companies worldwide will continue to struggle with the global economic recession, fuel price fluctuations and the difficulty in raising ticket prices. Despite robust business aviation forecasts, there may be short-term customer financing challenges for the business jets sector.
Building on the example set by engine manufacturers Pratt & Whitney and Rolls-Royce Group — to get 50% of revenues and 60% of profits from their services business — Aerospace contractors are learning how to take on, measure and internalize risk to make support and services offerings profitable. This includes understanding how to service the equipment they manufacture, and assembling the necessary infrastructure, capabilities and people to operate it.
Overall, in the next two decades, Boeing forecasts delivery of 29,400 new commercial aircraft worth $3.2 trillion. Honeywell’s forecast predicts 17,000 new business aircraft valued at $300 billion.
The Aviation segment of General Electric produces, sells and services jet engines, turboprop, turbo shaft engines, and related replacement parts for use in military and commercial aircraft.
Honeywell’s Aerospace division is a leading global provider of integrated avionics, engines, systems and service solutions for aircraft manufacturers, airlines, business and general aviation, military, space and airport operations.
Pratt & Whitney is among the world’s leading suppliers of aircraft engines for the commercial, military, business jet and general aviation markets. Pratt & Whitney’s Global Services provide maintenance, repair and overhaul services, including the sale of spare parts, as well as fleet management services for large commercial engines. The company produces families of engines for wide and narrow body aircraft in the commercial and military markets. Pratt & Whitney also sells engines for industrial applications and space propulsion systems.
We currently have Neutral recommendations on General Electric, Honeywell, Boeing and United Technologies.
Read the full analyst report on “GE”
Read the full analyst report on “HON”
Read the full analyst report on “BA”
Read the full analyst report on “UTX”
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