Questions in air about GE

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The Independent Online
FOR the past year, the big question about the Irish aircraft lessor GPA has been: Will it survive?, Bloomberg reports.

That question will probably be answered with a firm 'yes' tomorrow, when GPA's shareholders are expected to approve a restructuring plan that places the company under the management control of General Electric, the diverse US financial services, communications and manufacturing firm.

But since GE already owns a big engine manufacturer, other engine manufacturers and airline analysts will now wonder whether a GE-owned GPA will buy all of its engines from GE.

GE's engine division is among the world's top three suppliers of jet engines. And its Polaris Aircraft Leasing is already a strong player in the aircraft leasing business.

'GE could quite easily insist that all the leased aircraft use its engines,' said Zafar Khan, an analyst at Societe Generale Strauss Turnbull Securities. 'That would pose a threat to companies like Pratt & Whitney and Rolls-Royce.'

GE says that will not happen. 'We have 25 years experience in this business and we haven't done it to date,' a spokesman for GE Capital Corp said. 'There's a lot of housekeeping issues that need to be followed in the weeks following Monday's meeting, but I don't think forcing GPA to use GE engines will be one of them.'

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