GE Sees Shop-Visit Rebound On Horizon
GE Aviation sees engine shop visits climbing 30% year-over-year from the 2021 second quarter on, as utilization continues to rise particularly among the narrowbody fleet, the company said.
A difficult first-quarter (Q1) comparison means that the ramp-up will not lead to a significant change in total full-year 2021 visits compared to 2020, GE Aviation Services president and CEO Russel Stokes said during an investor outlook briefing earlier in March. But the trajectory is one sign of a recovery that should see 2019 shop-visit levels return within perhaps two years.
“We expect shop visits to be roughly flat this year with the profile that varies across quarters,” Stokes said. “We forecast first-quarter shop visits to be down around 40% due to a tough comp” that contrasts a depressed current-year air traffic environment with a 2020 Q1 of relative normalcy before the pandemic’s full ramifications hit passenger airlines, he added.
Stokes said GE’s “best-case” sees the 30% quarterly improvements leading into an even steeper ramp-up in 2022. Annual shop visits of GE and CFM International engines would return to 2019’s level of about 5,400 in 2023, with narrowbody work—which makes up the bulk of GE’s 37,000 engines—returning more quickly than widebody work. CFM is a 50-50 joint venture between GE and Safran.
The assumptions are based on narrowbody departures returning to 2019 levels in 2023, with widebodies taking another year to reach pre-pandemic levels. Activity of the combined GE-CFM fleet measured by departures bottomed out at 25% of comparable 2019 levels in March 2020 and was stuck at about 50% of 2019 levels from July 2020 through the end of January, GE figures show. But recent upticks in traffic demand in several key domestic markets, including the U.S., are helping boost utilization.
GE says that while shop visit volumes are down, work scopes—the amount of material used during overhauls—have not declined.
“The nature of shop visits has remained stable as we’re seeing tailored but robust work scopes internally,” Stokes said.
GE’s assumed rate of recovery will help minimize downside risk of airlines using idled equipment to defer maintenance. With so many aircraft parked, operators are swapping equipment in and out of their schedules to use up as many available hours and cycles—or green time—in their fleets as possible before inducting equipment for maintenance visits. GE calculates that this strategy makes sense up until 85-90% of a fleet is active. The company is confident that the narrowbody fleet will hit 90% utilization around mid-2022.
“This green time has contributed to a decrease in shop visits in the interim, and it’s factored into our recovery profile as we go forward,” Stokes said.