Bloomberg: GE CEO Optimistic About China's Aviation Market, Trump’s Visit to China to Bring New Business Opportunities

Larry Culp, CEO of U.S.-based GE Aerospace (General Electric Aviation), said that as China plans to purchase 200 Boeing passenger aircraft, the company is confident it will secure additional orders for aviation engines from the Chinese market. He noted that China’s proposal to buy Boeing planes marks a crucial first step in reopening the Chinese market for sales, and will bring substantial opportunities for GE Aerospace in engine supply and long-term maintenance services.

Speaking on Sunday during an interview with Bloomberg Television, Culp emphasized that China’s planned acquisition of 200 Boeing commercial aircraft holds significant importance for restoring sales in the Chinese market. He expressed optimism about the company’s future business prospects in China.

This deal is seen as China’s first major purchase of American-made commercial aircraft in nearly a decade. As one of Boeing’s primary suppliers of aircraft engines, GE Aerospace stands to benefit from both engine sales driven by aircraft deliveries and long-term after-sales service demands. The agreement, involving more than 200 Boeing aircraft, represents Boeing’s first large-scale commercial aircraft order in China in over ten years—symbolizing a pivotal breakthrough for the U.S. aircraft manufacturer after years of losing access to the Chinese market.

U.S. President Donald Trump recently stated that China has agreed to purchase 200 Boeing passenger jets and will also acquire between 400 to 450 engines from GE Aerospace. He added that future orders could potentially expand further to as many as 750 aircraft, although no specific delivery timelines or other details were provided.

This aircraft procurement deal is among the most prominent commercial outcomes from Trump’s recent visit to China. He regarded it as a key economic and political achievement of his trip and repeatedly highlighted in public statements that China would be purchasing aircraft and aerospace engines from American companies.

However, compared to earlier market expectations, this transaction falls short of some investors’ hopes. Prior to the announcement, analysts had anticipated China might declare purchases of around 500 aircraft. As a result, following the release of the actual figures, shares of Boeing and GE Aerospace initially faced downward pressure.

Despite this, industry experts believe the true value of this deal extends far beyond the aircraft themselves—it lies in the long-term business opportunities unlocked by re-entering the Chinese market.

Aerospace industry analysts point out that engine manufacturers operate under a different business model than aircraft manufacturers. Beyond selling equipment, engine companies derive their most significant revenue streams from decades-long maintenance, inspections, parts replacements, and heavy overhaul services after aircraft are in operation. Therefore, each newly sold engine typically represents a long-term and stable stream of cash flow.

For GE Aerospace, this transaction may lead to sustained demand for engine deliveries and after-sales services over many years. Market observers consider this a key reason behind the company’s continued optimism regarding the Chinese market.

According to previously published data, GE Aerospace’s commercial aviation engine and services business continues to grow strongly, with related revenues increasing by 34% year-on-year and order volumes surging 93% compared to the same period last year. With existing order books already very robust, the addition of this large-scale aircraft procurement from China will further enhance the company’s revenue visibility for the coming years.

During Trump’s visit to China, both Culp and Boeing CEO Kelly Ortberg accompanied a delegation of U.S. business leaders to Beijing. The two executives joined over a dozen top U.S. corporate leaders in this state visit, aiming to advance commercial cooperation between the two nations.

Shortly after Trump concluded his China trip in mid-May, Culp and Ortberg separately visited the headquarters of China’s National Development and Reform Commission (NDRC) to hold talks with Chinese officials. The broader market widely believes these meetings aimed to translate the principle-level consensus reached by national leaders into concrete commercial arrangements, regulatory approvals, and confirmed delivery schedules.

According to official Chinese communications, Culp met with Li Chunlin, Deputy Director of the NDRC, while Ortberg held discussions with both Li Chunlin and NDRC Director Zheng Shanjie.

The official summaries of the meetings did not directly mention the aircraft procurement deal. However, Li Chunlin told Culp that he hoped GE Aerospace would continue to increase its investment in China; Zheng Shanjie expressed support for Boeing establishing closer partnerships with Chinese enterprises.

Cameron Johnson, Senior Partner at Shanghai-based supply chain consultancy Tidalwave Solutions, believes that follow-up meetings between corporate leadership and Chinese regulators after the summit are likely intended to concretize commitments made at the leadership level—including securing regulatory approvals and finalizing actual delivery timelines.

At a state banquet hosted in China, Culp and Ortberg sat beside senior executives from Air China and Commercial Aircraft Corporation of China (COMAC), respectively. Market observers interpret this seating arrangement as reflecting China’s emphasis on aviation industry collaboration and suggesting potential for deeper future exchanges among relevant enterprises.

For GE Aerospace, the significance of this transaction goes beyond merely adding new engine orders—it lies in the potential for decades of ongoing maintenance and service revenue. Should the procurement scale expand further to the 750-aircraft level mentioned by Trump, the long-term earnings potential for the company would far exceed the currently known value of the orders.

Against the backdrop of sustained recovery in global air passenger demand and airlines accelerating fleet renewal, China’s renewed procurement appetite could become one of the most important growth drivers for the global aviation industry in the coming years.

Source: rfi

Original article: toutiao.com/article/1867398281515072/

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the position of the publisher.