GE Aviation Chief Is Open to Acquisitions to Bolster Engine Unit

(Bloomberg) -- General Electric Co.’s top aviation executive already has an eye out for acquisitions that could bring the jet-engine maker new capabilities once it completes the breakup that will make it an independent company.

John Slattery, chief executive officer of GE Aviation, singled out electrification technologies as one area where deals could bolster the company’s portfolio as it works to achieve the next major jump in fuel efficiency by the mid-2030s. Any acquisitions would need to align with GE’s longer-term strategy and have a sound business case, he said in an interview at the Dubai Airshow on Monday.

“If those two criteria are met, we have the capability, we have the capacity, we have the appetite and we have the interest to look at opportunities in the marketplace,” Slattery said.

GE last week announced it would split into three publicly traded companies over the next three years with GE Aviation, the conglomerate’s largest industrial division, remaining as a stand-alone company by 2024. Slattery will remain in charge of the jet-engine business as part of the plan.

Underscoring the potential for GE Aviation to thrive as a stand-alone business, Slattery said, was its ability to effectively break even on free cash flow and spend $1.8 billion in research and development in 2020 despite the steep decline in demand. 

“As we think about the future as a robust franchise with solid free cash flow metrics, I think we’re well-placed,” he said.

The more immediate challenge is ramping up capacity to fulfill mounting demand for engine maintenance amid the rebound in air travel after the pandemic grounded flights worldwide. The company expects departures of narrow-body passenger jets to reach pre-pandemic levels by the first quarter of 2023 while wide-bodies will normalize a year later, Slattery said.

“We’ve done some great work over the last 18 months preparing for the ramp-up that we are now seeing materialize and we’re projecting will continue sequentially for a number of quarters ahead,” Slattery said.

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