On the Record with
GERARD LAVIEC, PRESIDENT AND CEO, CFM INTERNATIONAL

"The results were fantastic, it was our best year ever in terms of deliveries and revenue," he said, "and sales were much better than I had expected."

CFM56 engines are the sole powerplant for the Boeing 737, and Airbus A340, and last year captured 53% of the Airbus A320 family of single-aisle airliners.

Now Laviec is focusing on an aggressive testing program over the next few months of major components for the company's TECH56 technology demonstrator, which will form the basis for either a brand new CFM successor or major improvements to the current family. Some components, such as the new swept wide-chord fan will be offered as retrofits to existing customers.

"We will make a decision on a new engine in about 12 months," Laviec said. "By then we will have assessed the need for a new product, and have a marketing strategy in place."

The first application for any new engine will be the Airbus A320 family, according to Laviec. "If Pratt does something there, we will be there much faster and better," he promised, referring to P&W's proposed geared-fan PW8000 program.

Revenues hit $6.7 billion last year for CFMI, which is jointly owned by GE and Snecma of France. Deliveries of the world's best selling engine totaled 1,101 CFM56s (including 21 sold as the company reduced its leasing pool), meaning production has more than tripled in the last five years.

New orders totaled 986, compared with Laviec's mid-year projections of 600-700. "Orders and deliveries are quite close together, so there hasn't been much reduction in our backlog," Laviec noted cheerfully.

The backlog of firm orders remains close to 3,300 engines ­ or three years' production at the present rate-with another 4,000 engines selected on option orders but not yet under contract. Including these engines, sales of all six CFM56 models now total17,000 firm and committed.

"There are basically two trends," said Laviec. "We are seeing a lot of repeat orders as airlines who are already CFM customers exercise options on aircraft, and leasing companies have retained their importance as major customers."

He noted CFM has been logging new customers at the rate of two per month, double that of 1998, with new wins and as older aircraft are sold downstream to smaller operators. It now has 300 customers in 96 countries.

The latest application for the CFM56 is the 107-passenger Airbus A318, where Laviec maintains he will not chase market share. Thus, CFM has won only the 15 aircraft ordered by Air France out of total sales of about 130.

"We are happy with that," he told Show News. "Our position is to help existing customers who want our engines on their complete Airbus A319 family range, but we must do that without jeopardizing our business and doing as our competitor is doing. We must get some money for our engines."

Laviec was referring to Pratt & Whitney's low pricing of its new PW6000 engine in a last-ditch bid to reenter the narrowbody airliner market. Pratt launched the engine on the A318, which to date remains its only application.

A major concern of Laviec's is that CFM play fair with Boeing, which uses the CFM exclusively to power the Boeing 737 that competes with the Airbus A320 family and the A318. "If we sold below cost to Airbus, we would have to do the same for Boeing. And that we will not do. We will not drag down the market," Laviec said.