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Daily Insight: Wednesday 20 February 2019: Does a PW-RR Merger Make Sense?

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News

Both Pratt & Whitney and Rolls Royce have had problems introducing new technology engines on time.  The GTF experienced substantial delays with the narrow-body A320 family, and the RR Trent series of engines is correcting problems across multiple variants, impacting the Boeing 787 and several Airbus models.

Each company has allocated substantial resources to their problems, and reduced short-term profitability as they are being addressed.  But the fundamental fact remains that Pratt & Whitney

no longer has a new generation wide-body engine in production, and Rolls Royce has no new generation narrow-body engine in production.  As a result, they don’t compete head to head today, as they did in the past.

Analysis

Ties between GE and Boeing have become closer, with GE the exclusive provider of engines for the 777X.  Rolls Royce has been getting closer to Airbus, being the exclusive provider for the A330neo and A350XWB, while Pratt & Whitney is the exclusive provider for the A220 and shares the market with CFM International on the A320neo family.