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FAA hands out USD125 million in contracts – Suppliers Share Wrap

Analysis

Boeing, General Electric, Pratt & Whitney, Honeywell and Rolls-Royce North America have all received contracts from the US Federal Aviation Administration, as part of its Continuous Lower Energy, Emissions and Noise (CLEEN) programme.

CLEEN is aimed at introducing new technologies and techniques into commercial aircraft from 2015, to enhance fuel efficiency, cut engine emissions and reduce noise. The published goals of the programme are a 33% reduction in fuel burn, a 60% cut in nitrogen oxide emissions and a reduction in cumulative aircraft noise levels by 32 db.

The FAA will invest USD125 million in the programme, which will be matched by the five companies. Most contracts are for an initial one-year period, with four one-year extensions available.

Boeing will receive USD25 million and invest a matching USD25 million to conduct flight tests of emergent airframe and engine technologies. GE Aviation and the FAA will invest USD66 million on three separate technologies. Several Alaskan Airlines B737NGs will be equipped with GE flight management computer systems to develop more efficient flight-control computer technologies.

Honeywell signed a five-year, USD27 million contract to develop technology to reduce fuel burn and test aviation biofuels. Pratt & Whitney received a similar contract to mature new jet engine technologies aimed at reducing fuel burn, noise and emissions.

In trading on Thursday, Honeywell shares lost 2%, while Pratt & Whitney was down 0.9% and Rolls-Royce fell 0.7%. Boeing shares were flat.

Selected Aviation suppliers' daily share price movements (% change): 24-Jun-2010

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