- CFM56 engines were chosen to power 54 percent of the 507 aircraft ordered in the 100+ passenger market through the end of June. These orders encompass 562 engines to power 276 aircraft at a value of about $2.8 billion dollars.
CFM56 engines are produced by CFM International, a 50/50 joint company between Snecma Moteurs (Safran Group) of France and General Electric of the United States.
"I said early last year that, if we had 700 orders by the end of 1999 we would consider it a very good year," said Grard Laviec, president and CEO of CFM. "I was pleasantly surprised when it turned out to be the fourth best year in our history (980 engines), as well as in the industry. All indications are that the market is still very strong, and I believe CFM could end the year with 800 or 900 engine orders."
Laviec cited several factors keeping the market strong. First, the world economy remains strong, including an Asian recovery. Airlines have remained profitable and have maintained the balance between orders and deliveries to avoid aircraft over capacity. In addition, growth in revenue passenger miles worldwide exceeds predictions.
"The negative cyclical factors seen in previous downturns are not as strong in today's market," said Laviec. "The one unanswered question is the future of fuel prices. The market has seen fluctuations in the past and, so far, airlines have maintained profitability in the current environment. However, the long-term impact of unstable prices is still unclear. Even with that, though, new forecasts predict a very soft landing for the industry and no significant drop in demand until around 2003."
This strong market environment will enable CFM to maintain its current production rate of about 1,000 engines annually for the next three years (2000, 2001, 2002) with minimal impact on its firm backlog of about 3,000 engines.
CFM56 engine production reached record levels in 1999, with CFM producing 1,080 engines by year end. Planned production for 2000 and 2001 is about 1,050 with only a slightly lower rate scheduled for 2002.