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GE Wins U.S. License to Supply Engines for New Chinese Aircraft

By Howard Smith – Updated Apr 7, 2020 at 1:50PM

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COMAC C919 narrow-body passenger jets are expected to begin service next year.

GE Aviation, a unit of General Electric Co. (GE -1.24%), and joint venture partner Safran Aircraft Engines, have been given a license by the Trump administration to supply jet engines for the new C919 Chinese passenger jet, according to a Reuters report. CFM International, the joint venture company, was chosen by Commercial Aircraft Corporation of China (COMAC) to supply its LEAP-1C engines for the narrow-body jet set to begin service in 2021. 

The report quoted a GE spokeswoman as saying, "We received notification that GE Aviation has license approval for engines for the C919." In February, Bloomberg cited a Dow Jones report saying there was opposition in the Trump administration to grant the license, with fears the Chinese could reverse-engineer the engines. President Trump, however, later indicated he supported the deal, tweeting on Feb. 18, "I want China to buy our jet engines, the best in the World...."

close up of jet engine on wing of aircraft

Image source: Getty Images.

LEAP engine

The LEAP family of engines was launched in December 2009, when COMAC selected CFM as the supplier for the 150-passenger C919 project. At the time, COMAC forecast there would be more than 2,000 C919 aircraft built over a 20-year period after its launch.

Since its first LEAP engine orders in 2011, CFM has delivered over 19,000 worth more than $275 billion at list price. In 2019, CFM delivered 1,736 LEAP engines, up from 1,118 in 2018. A competitor to the Boeing (BA -5.37%) 737Max, the C919 entering into the market should give a boost to GE Aviation, which provided about 35% of GE's total revenue in 2019.

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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