On the Record with
GEORGE OLIVER, PRESIDENT, GE ENGINE SERVICES

Services have long been a driver of growth at GE Aircraft Engines, and that aspect of the business is thriving under new GE Engine Services president George Oliver.

Revenues at Engine Services are expected to grow to $5.5 billion to $6 billion from $5 billion last year, producing fully 50% of the turnover at GEAE. "We're being conservative, but we'll get double digit growth. It depends on the economy," Oliver told Show News.

The backlog of service contracts with airlines to look after their engines was $18 billion at the end of last year, and Oliver expects to see it increase by 20% this year.

"What we have done well is that after getting a good footprint on our engines globally, in the last year or so we have become proficient on those made by our competitors," Oliver explains. This strategy began when GE found that airlines wanted their mixed fleets looked after in a one-stop shop, but it has since taken on a life of its own.

GE's Selma plant in Brazil, for example, has now become a recognized center of excellence for repair and overhaul of Pratt & Whitney JT8D engines. "It has become extremely successful," said Oliver. "It is operating in a tough market that is on a downturn, but our volumes have gone up."

Engine Services also has expertise on Rolls-Royce RB211s and PW JT9s in Wales, and the PW4000 in its joint venture with Malaysia Airlines. "We're driving our technology in a broad way to better serve the customers, and we're getting incremental growth-mainly on Pratt engines," he notes.

But Services doesn't stop there.

"The way we drive our continued growth and the continued strength of our business is around three areas-technical and operational excellence and really pushing to exceed our customers' expectations," says Oliver. What that really means is:

• A focus on technology with the introduction of a number of new products such as the CFM56-3 core upgrade recently launched with a $300 million order by Southwest Airlines. Kits are available to upgrade CFM56s and CF6s in various ways, and the CF34 for regional jets will be next in line for an infusion of technology.
• Long-term service and maintenance contracts are being strengthened and extended longer term, allowing technology improvements to drive down the cost of ownership to the airline.

"We are using our technical strength and our financial strength to reinvest in products that better serve the airlines, and our Six Sigma processes to drive improvements in our own performance that we call striving for operational excellence."

Oliver notes that Engine Services scored significant gains in the last year in operational excellence, using Six Sigma and digitization to improve many aspects of its interaction with customers, from deliveries of everything from parts to invoices.

Among the advances in other products:

• On Wing Support: "This is a diamond in the rough," says Oliver, but one that is scoring higher customer satisfaction than any other business. GE's "Swat" teams support any customer, 24 hours a day, anywhere in the world, and the effect has been twofold: in many cases they minimize the cost GE would incur in warranties, yet as a marketing tool they are adding new business. "So we can respond, get high grades from the customer on a service, manage well within our warranty budget, and then we get significant incremental opportunities as we serve those customers," said Oliver. "It has become a quick, low-cost solution to what they might have had to do with those engines on the spot."
• MCPH-maintenance cost-per-hour contracts. These contracts have become totally flexible so the customer builds what he wants from a menu that includes engines, components, accessories, inventory, and leased engines.
• Engine leasing. "A big growth business," Oliver says. "The inventory is constantly changing, but we have the biggest engine leasing business in the industry." And among the 300 or so GE-leased engines are a healthy number of Pratt and Rolls products.
• Inventory management. Engine Services has broken out the materials service business as a separate unit to oversee that function throughout and remove any glitches. "There's a lot of activity going on here, a lot of airlines have signed up for inventory management," Oliver says.
• Remote diagnostics. GE Engine Services now monitors about 3,000 engines. "There is tremendous value to be had by seeing potential maintenance issues ahead of time, being able to schedule them and minimize the cost," Oliver explains. "We've got a huge technology development going on now around diagnostics, and this area will have significant growth going forward."

By John Morris