GE may be another play on this theme. It looks like GE Aviation does the retrofit (RNP) on the legacy 737 models that provides operating efficiencies that save fuel and reduce in air flight delays.
Next-Gen Pace Picks Up
Jan 25, 2008 By Henry Canaday/Overhaul & Maintenance
aviationnow.com
From the article:"...Southwest Airlines will be adding the dual flight management systems (FMS) required for RNP, along with other equipment, to all of its classic Boeing 737s in a special modification line in 2008 and 2009. The carrier's 737-700s already are equipped for RNP.
The classic upgrades are being provided by GE Aviation Systems. The market for these and similar upgrades is "starting to heat up," according to Jack Befus, acting director of civil flight systems. "We are seeing requests for proposals, pricing and technical information."
Befus attributes increased interest to both RNP's short-term savings and the fact that dual FMSs eventually will be necessary to deliver the capabilities for full next-gen.
RNP already has been bringing significant short-term benefits, in time saved and timely arrivals, to GE customers in the U.S., Canada and Europe. GE is involved in next-gen trials in Europe, where Scandinavian Airlines estimates that its RNP approaches at Stockholm Arlanda could save $12 million a year, including $6 million in fuel savings, and reduce annual emissions by 23,000 metric tons of carbon dioxide. The same tools have proven the safety and fuel savings of RNP at Linzhi Airport..."
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With a forward PE of 10, BA may be a better pure play but GE should also benefit from this upgrade/retrofit cycle.
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