Avio Acquisition Could Create Growth Opportunities Beyond Aviation: Shipping and Oil & Gas Beckon

ENP Newswire - 27 December 2012

Release date- 21122012 - Avio, the Italian aviation company GE agreed to acquire for $4.3 billion (EUR3.3 billion) today, has been supplying GE's aviation business with low pressure turbines, accessory gearboxes and other components since the 1980s.

Parts made by Avio help power aircraft as varied as Air Force One and Apache helicopters. They also serve inside the GEnx, the fastest-selling large jet engine in GE's history, now powering Boeing's 787 and 747-8 passenger jets.

Two to Tango: Marine CH-53E Super Stallion helicopter takes off from the deck of USS Makin Island. The ship and the helicopter are both powered by GE engines with Avio components inside.

But GE says that the opportunities for Avio reach beyond aviation into ship propulsion, power generation, oil and gas extraction, and elsewhere. 'We want to use Avio's expertise to solve customers' problems across industries,' says John Godsman, GE Aviation's general manager for business development.

Some seagoing GE technology like the LM2500 marine gas turbines already have Avio control systems and other parts inside. The turbines power advanced ships like the NAVY's first hybrid vessel, USS Makin Island, and the Queen Mary 2, the largest ocean liner ever built and fastest one in service. But Avio also makes hi-tech, heavy-duty transmissions that transfer large loads on aircraft like the A400M, a large four-engine military turboprop made by Airbus. Godsman says that 'this know-how can be applied to mechanical drives in the marine segment, creating incremental growth in core propulsion markets for GE.'

Other opportunities hail from the oil and gas industry. Energy companies need rugged and powerful pumping transmissions that help compress and run as much as four million gallons of water into deep shale gas wells. 'They use geared transmissions that work in high-speed, low-torque environments,' Godsman says. 'These things need to last as long as 9,000 hours without a glitch.'

Other growth includes building transmission systems for the $50 billion helicopter manufacturing and services market, an industry GE knows well.

'None of these product opportunities have been available to GE,' Godsman says. 'Avio will enable us to go after all of them.'

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