From: Reuters
Published January 20, 2008 11:47 PM

GE jet engine backlog hits $5 billion in China

By Scott Malone

BOSTON (Reuters) - As China's aviation industry takes off, General Electric Co's <GE.N> orders for jet engines in that country have hit the $5 billion mark, the second-largest U.S. company by market capitalization said on Sunday.

Demand for jets in the world's fastest-growing economy is accelerating as a nascent local industry aims to take on Boeing Co <BA.N> and Airbus, a unit of EADS <EAD.PA>, the world's leading aircraft makers.

"The growth in China -- not just the growth facilitated by the sale of aircraft by Boeing and Airbus into China, but also the indigenous creation of aviation in China -- is really exceeding everyone's expectations," said Chet Fuller, chief marketing officer at GE Aviation, in a phone interview.

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China's state-run AVIC I Commercial Aircraft Co Ltd has selected GE's CF34 jet engine to power the ARJ21-700 regional jet it is developing.

So far AVIC I, parent of Xi'an Aircraft International Corp <000768.SZ>, has 85 firm orders for that 90-seat jet, scheduled for its first flight during the first half of this year.

GE worldwide last year sold about 3,400 jet engines worth about $25 billion, with 428 of them going to China, Fuller said. The last of the $5 billion in Chinese orders are expected to ship in 2014.

Most of GE's jet engine sales into China so far have been through CFM, its joint venture with a unit of French conglomerate Safran <SAF.PA>.

GE's competitors in the jet engine business include Britain's Rolls-Royce Group Plc <RR.L> and the Pratt & Whitney arm of U.S. conglomerate United Technologies Corp <UTX.N>.

Fuller noted that GE is seeking certification to begin assembling jet engines in China.

It could take two to four years to get all the regulatory approvals needed to do so, he noted.

With revenue passenger miles -- a standard measurement of airline performance -- growing at about three times the world average, China is also one of GE's fastest-growing aviation markets.

"It's not a small system anymore," Fuller said. "This is equivalent of all of American Airlines and Continental Airlines. These are big numbers. These are large systems with lots of airplanes in them."

(Editing by Brian Moss)

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