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GE Completes Successful Engine Test With Sustainable Fuel

New jet engines have the potential to boost GE Aviation's revenue

General Electric Company's (GE) aviation arm announced that it has successfully completed a ground test operating its Passport long-range business-jet engine with sustainable aviation fuel (SAF).

Key Takeaways

  • GE Aviation has successfully tested its Passport jet engine with 100% sustainable aviation fuel.
  • GE said that the preliminary tests were favorable, with the Passport engine performing comparably to when it runs on petroleum-based aviation fuel.
  • The test fuel, called HEFA-SPK, is made from cooking oil, waste fats, and greases.
  • The conglomerate's sustainable fuel Passport engine has the potential to increase sales as airlines look to improve operational efficiency and reduce carbon emissions. 

According to GE, the thrust-class turbofan was tested over several days in March at GE Aviation's Peebles Test Operations facility in southeastern Ohio to figure out how well the engine performed while using the 100% sustainable fuel. Currently, the Federal Aviation Administration (FAA) caps SAF blends—which are mixed with conventional aviation fuel—at 50%.

Favorable Test Results

The test used a type of SAF called HEFA-SPK, a sustainable fuel made from cooking oil, waste fats, and greases. GE, which has a 14% market share in the world commercial aircraft engine industry, said that the preliminary tests were favorable, with the Passport engine performing comparably to when it was run on petroleum-based aviation fuel.

Reduced Carbon Emissions

GE Aviation's head of the Passport testing program, Melvyn Heard, said that the engine would help its customers reduce their carbon footprint. "As our testing shows, the Passport engine, like all GE engines, can operate on approved Sustainable Aviation Fuel today and in the future. Our customers can be confident that the Passport engine can help meet their sustainability goals to reduce CO2 emissions in flight, thanks to the Passport's more fuel-efficient technologies compared to previous-generation business jet engines and ability to operate on lower-carbon fuels," he said.

Impact for Investors

GE Aviation's successful test of its Passport engine with sustainable fuel highlights the conglomerate's commitment to innovation and providing sustainable solutions for its customers. Although GE's Aviation segment faced considerable headwinds during the pandemic, it still made up the lion's share of the company's total revenue in 2021. Moreover, GE expects the aviation business to deliver revenue growth of over 20% this year. GE jet turbines that operate on 100% sustainable fuel have the potential to increase sales even further as airlines look to improve operational efficiency and lower their carbon emissions. 

GE shares have tumbled -29% over the past 12 months compared to the Dow Jones Industrial Average (DJIA), which fell by -6% over the same period. The 130-year-old conglomerate plansspin off its non-aviation businesses over the next two to three years as it undergoes a major restructure to turn its fortunes around.

Disclosure: The author held no positions in the aforementioned securities at the time of publication.

Article Sources
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  1. General Electric Aviation. "GE Aviation Completes Testing of Passport Engine Using 100% Sustainable Aviation Fuel."

  2. Statista. "Market Share of the Leading Commercial Aircraft Engine Manufacturers Worldwide in 2020."

  3. Statista. "General Electric's Revenue in FY 2021, by Segment."

  4. CNBC. "General Electric's Shares Fall as Supply-Chain Woes Hit Fourth-Quarter Revenue."

  5. YCharts. "Fundamental Charts."

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