CFM International executives have revised their order projections after finding an anticipated downturn for 1999 and 2000 hasn't materialized.

"We did not anticipate 1999 and this year to be up in terms of orders," said Gerard Laviec, president and CEO of the General Electric-Snecma joint venture. While orders did decline from 1,380 in 1998 to 980 in 1999, the order level remained significantly greater than expected. "It was an excellent year," said Laviec.

Performance this year is expected to be as good as last. Laviec predicted the company will have booked 750 engine orders by the end of Farnborough 2000. "Those are great numbers," he said. The level has allowed CFM to maintain its backlog at about 1,000 engines, despite fears that it would decline.

The main reason for the improved outlook is that Asian economies have recovered faster from their financial malaise than expected. And "traffic growth is still very high," Laviec said. CFM now expects the next two to three years to show similar order levels.

In terms of income and deliveries, activity for the next few years is expected to be similar to last year, when the company earned $6.7 billion.

About 20% of CFM's income is derived from its spares business. Those activities are expected to grow, Laviec said. With a large number of engines ordered only recently, spares demand will not be felt for a few years, but then could significantly contribute to earnings.

Another potential money-maker could be CFM's electronic commerce activity. It should become operational late this year. Customers will be able to order engines, parts, and track orders through the system. CFM already has an electronic system, Spec2000, but its use is limited to selected large customers. The new system will be accessible to all customers. GE and Snecma decided it made more sense to set up their own business-to-business operation rather than using a third-party provider, Laviec said.

By Robert Wall