A Commercial Aviation Consultancy

The mood at Pratt & Whitney is more optimistic today than we’ve seen it in several years. The GTF is nearing entry into service and will generate a strong boost to P&W’s commercial engine business. The military business is increasingly successful with the 5th generation military engine on the JSF performing well. P&W Canada recently celebrated the 50th anniversary of the PT-6 engine, which just surpassed the 50,000th engine delivered as new models continue to be introduced. Revenues are up, the slump in the aftermarket has bottomed out, and optimism, along with the harsh realities of the work ahead that still needs to be done, are setting the positive tone.

PWAs the largest business unit within P&W, the commercial engines division drives company performance. With three thrust classes of the GTF preparing to enter service on 12 models from five different aircraft manufacturers over the next five years, the focus at P&W has changed.  It was only three years ago when the company’s main focus was on convincing the industry that its innovative architecture provides a true step-change in fuel economy and environmental performance. Today the company is firmly focused on the execution and optimization of the manufacturing processes, through high technology, to deliver the promised improvements on time and on budget.

With 5,500 engines on the announced order book for the GTF P&W will need to double its annual production rate over the next five years. This type of change demands an intense focus, and P&W’s CEO, Paul Adams, has implemented a four part strategy to transform the company through that growth period. The strategy is straightforward — concentrate on the core businesses, execute key programs, drive cost reduction and grow the aftermarket.

Paul Adams

Core Competencies

In order to better the focus on core competencies, P&W recently divested its rocket-engine business, selling Rocketdyne to Aerojet, along with divesting their power systems business to Mitsubishi. These two divestitures will enable P&W to fully concentrate on their core business – manufacturing turbo-machinery to power aircraft. Additionaly, the Auxiliary Power Unit business, essentially a small turbine engine for aircraft applications, has been shifted from United Technologies Aircraft Services to P&W, as it better fits with P&W’s core business.

P&W’s strategic buyout of Rolls-Royce’s share of International Aero Engines and the V2500 program has enabled it to combine the two aftermarket support operations into a single unit. Because many existing V2500 customers on A320ceo are choosing the GTF for their A320neo orders, there is a strong overlap that makes a single organization more cost-effective than maintaining separate operations.

Execution of Key Programs

Delivering on time, on spec, and on budget is now the primary focus of the three major groups within P&W: commercial engine, and small turbine. Each division has a key product leading its future growth, the GTF, F135, and PT6 respectively. While R&D efforts continue to look towards the future, the primary focus today is on execution and delivery for each group. Nowhere is this more evident than with the GTF, with applications on 12 aircraft due within the next 5 years.

But because engine programs are required to be developed well in advance of an aircraft, P&W is looking at 2nd and 3rd generations of GTF engines. P&W believes it can achieve an additional 10%-15% in fuel savings from its second generation GTF engine, and an additional 10% beyond that in a third generation product. Within a decade, P&W believes it can achieve a remarkable 26-31% reduction over today’s engines with its 2nd generation GTF.   These reductions are close to those typically ascribed to open rotor concepts, but without the negative tradeoffs in noise, slower airspeed, and larger propellers associated with open rotor designs.

With Rolls-Royce announcing it is moving to a geared architecture, and SNECMA in France, a joint venture partner in CFM, announcing its new research into gears, the acceptance of geared technology and the benefits of a geared architecture are now being adopted by its biggest critics. P&W has first mover advantage, and an opportunity to establish a leadership position in fuel economy and environmental performance that will enable it to gain market share.

Cost Reduction

Initiatives by P&W to reduce costs while improving execution include the development of a joint logistics center with UPS, a 600,000 square foot facility to be located in Londonderry, NH. Combining UPS logistics competencies with P&W’s new command center to track performance and parts across the company and its suppliers, the company will, through high technology, have the ability to view the status of every part and engine in production.

In addition P&W is placing additional focus on manufacturing technology.  As a pioneer in the use of additive manufacturing (the 3D printing of parts), P&W is able to include 24 additive parts in the first production GTF engines. The major advantage of additive manufacturing is that parts can be designed with unique shapes, cooling ducts, and remain lighter in weight than conventionally manufactured parts. The difficulty is that taking full advantage of the capabilities for adaptive manufacturing requires a new way of thinking about design, as engineers can now optimize designs using shapes that would not be possible to execute by traditional metal cutting and milling processes.

P&W recently established a research center for adaptive manufacturing with the University of Connecticut, and is teaching its engineers the benefits of designing for an additive, rather than subtractive, manufacturing processes. P&W has also fully integrated its additive manufacturing technologies by controlling production of raw materials, the powdered metal that is the feedstock for additive manufacturing processes. Through control of the feedstock process, P&W can ensure the characteristics needed from specific metals used in additive manufacturing are achieved.

As engines run at higher pressures to become more efficient, they also run at hotter temperatures. As a result, additional cooling must be provided to components, as the ambient air within an engine is often hotter than the melting point of the metal. To provide protection, cooling technologies, including coatings, are applied to components to manage their temperature and avoid premature wear or meltdown.

While one of P&Ws competitors claims industry leadership in ceramic matrix composites, P&W is equally, if not more familiar, with those technologies from its fifth generation military engine, which has the highest operating temperature of any engine in service, and requires the most advanced cooling technologies. Through P&W funded “dual use” R&D, the company is able to capitalize on the benefits of that experience and bring advanced technologies from military programs into their commercial programs.

CMCs and other advanced cooling technologies also have a downside – they are very expensive, and more difficult for customers to maintain. But this is where P&W has gained a competitive advantage. The architecture of the GTF, with a slower turning fan and faster turning core, enables the engine to achieve high performance at a lower temperature than competing engines, providing an economic benefit to customers when exotic cooling materials are not needed.

PW’s R&D on underlying manufacturing and materials technologies are enablers for strong execution and delivery of “dependable engines” and future cost reduction.

The Aftermarket

The aviation industry has been increasingly moving towards “by the hour” maintenance programs over the last decade because of the aligning interests of both the engine OEM and the customer. In the traditional unit pricing model, the engine OEM made money each time a part was sold, and had an interest in selling as many parts as possible. The airlines, of course, wanted the opposite.

With “by the hour” maintenance programs, airlines pay the OEM a fixed price for maintenance. This provides an incentive for the OEM to strengthen its performance and keep an engine “on-wing” for as long as possible, as the longer it stays on wing, the more profit the OEM, and airline make. By the hour programs take the inherent conflict between manufacturer and customer out of the equation, and force each to focus on improving reliability, which benefits both parties. P&W expects to bundle by the hour maintenance contracts for more than 80% of its GTF engines, compared with historic levels of 60% for V2500 and 45% for PW4000 models.

The Bottom Line

Today P&W looks and feels like a different company than it was five years ago. It is focused on the execution of its narrow-body applications for the GTF, but also stands ready to jump into the wide-body market, if the right opportunities emerge. With investments to maintain technological leadership in additive manufacturing, as well as investments in second and third generation technologies for the GTF architecture, P&W is now well poised for future profitability.

© 2014, Ernest S. Arvai. All rights reserved.

One Response to Beyond the GTF – Transformational Change at Pratt & Whitney

  • I do not see P&W breaking into the Widbody market. They will struggle in the narrow body once GE and RR get their act together and go with the GTF system working.

    While no fault of theirs, they missed the boat with the 777X and the A350 (and did not have a proven design for the 787 or 747 programs at the time)

    If they stand a chance its to jump to the 3rd gen of the GTF (4th if you count the previous APU and Small Business jet market).

    Both GE and RR have more advanced materials developed and they can see the progression of P&W and go to 3rd generation GTF and have it solid and proven by the next offering.

    The only programs are re-engine (A330 and A380) and unless they actually produce a production engine now, they will not be a candidate for the A380 (RR seems to want both markets).

    The only remote possible one is the 757RS and that seems extremely unlikely given the market size for it.

    If Boeing goes with a mini twin aisle for the 737RS there would be an opening there.

    An alliance with GE who they do have a production relationship (or less likely RR) would serve both well and P&W is used to that sharing with the much less known contribution of MTU to the GTF.

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