For the last two weeks, GE Aircraft Engines' managers have been grappling with what the slump in commercial airline travel will mean for the business over the next couple of years.

        On Wednesday, Dave Calhoun, president of the Evendale-based business, said the best estimate is that engine deliveries will be 25 percent lower next year than what the company expected.

Calhoun

        Using that estimate, the company plans to cut about 13 percent of its total workforce, or 4,000 jobs including 800 in Greater Cincinnati, where it employs about 8,000.

        But Mr. Calhoun emphasized the situation is fluid and could change.

        "It's a signal that nobody knows the answer,” he said. "We all assume (airline) load factors have to come back."

        But, he cautioned: “If another event happened, God forbid. Or something else happens in the meantime, nobody can predict the outcome. I just don't want anyone to think we're completely done with this process.”

        Despite schedule cutbacks, the airlines are flying planes at only 40 to 45 percent of passenger capacity. The airlines need to keep their planes 65 to 70 percent full just to break even, said Paul Nisbet, analyst with JSA Research Inc., in Newport, R.I.

        The sudden downturn in airline passenger traffic since the Sept. 11 terrorist attacks is taking a particular toll on a mainstay of GEAE's business: CFM International, its highly successful partnership with Snecma of France.

        CFM is the exclusive engine supplier for newer Boeing 737 jetliners, narrowbody jets which most airlines use for domestic service.

        Mr. Nisbet said before the Sept. 11 attacks Boeing had plans to ramp up 737 production to 28 planes a month, but it now looks like that production line will drop to 16 planes a month.

        “Yes, it's fair to say that CFM will bear the brunt of this,” Mr. Calhoun said. “Boeing has announced its production rates will go down quite heavily and we're anticipating that.”

        GEAE and Snecma split the CFM production, with the Evendale plant producing all the engine cores and shipping half to Snecma's Villaroche plant. Snecma in turn produces all the fan sections and ships half to Evendale.

        GEAE was planning to produce 1,000 engine cores next year and assemble about 500 engines. Mr. Calhoun indicated that production schedule will be cut by about 25 percent.

        Mr. Calhoun said the market for CFM56 engines and the Boeing 737 jet will rebound.

        “It's a terrific product for us,” he said. “But I think it will be a couple years before this excess capacity is consumed by the industry.”

        Mr. Calhoun said all of GEAE's engine programs, except its small military engine business, will be affected by the market slump.

        Regional jets like those flown by Cincinnati's Comair and powered by GEAE's CF34 engines will also be affected, but possibly less than bigger jets because regionals give airlines greater flexibility.

        “I think we'll see a lot of flight time on the regional jets, and (the market slump) may be a good thing for the regional market in the end,” he said.

        GEAE has a heavy schedule of new engine programs on its plate, representing about $1 billion in research and development over the next year.

        While the company expects to defer about $100 million of that spending further into the future, he said, “nothing gets canceled.”

        “There will clearly be deferrals (in engine development programs) because the airframers (plane manufacturers) aren't going to have the cash flow to move at the same timetable as before Sept. 11,” he said. “We're trying to anticipate the pushouts as best we can. But the airframers haven't yet given us any details on that.”

        Among the major projects GEAE has in development are:

        • The GP7000, an engine being jointly developed with rival Pratt & Whitney for the Airbus Industrie superjumbo A380.

        • A growth version of the GE90 for the new long-range Boeing 777-200 and -300.

        • New versions of its CF34 regional jet engine.

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