DBEA55AED16C0C92252A6554BC1553B2 Clicky DBEA55AED16C0C92252A6554BC1553B2 Clicky
March 28, 2024
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There has been a flutter of news about GE expressing interest in powering the A330neo.  The news coming out now suggests discussions which, we understand, have been taking place for some time.  There are significant implications to this.

Let’s break it down by OEM. There are many moving parts, and we may not have covered all of them.  If you have thoughts on this, please add them below.

Airbus

  • This is what Airbus has wanted since it first started the A330neo program. Back then it was GE that dismissed the A330neo as not as attractive as the 787.  How times have changed.
  • Having the GE option for the A330neo is a big win.
  • But for a new engine option on the A330neo, Airbus will ask GE to offer a step-change in performance and capital to fund this option. After all, as Airbus tries to squeeze the A330-800 into the MoM space, cost and economics are crucial.
  • Almost certainly this interest is driven by customer interest.
  • Offering an engine choice means Airbus can squeeze Rolls-Royce much harder. GE has pulled ahead of Rolls-Royce on the 787.

Boeing

  • The 787 sales have slowed down. The other GEnx program, 747-8F, is also going slowly.
  • The once highly attractive market for the GEnx is not what it once was.
  • GE needs to see where else it can recover GEnx investment – Boeing doesn’t offer any options.

GE

  • GE wants to hedge its bets and that is prudent. They are likely pleased the NMA has not launched. GE has become over-dependent on Boeing. (Like Airbus and Rolls-Royce)
  • GE is surely been pushed along the A330neo path by customer interest. But is the market big enough for the investment required? However, Airbus does offer real and deliverable options at both ends of the MoM.  Boeing isn’t there – yet.
  • Moreover, GE has access to a powerful leasing partner that has managed to upset several A330neo campaigns in favor of 787.
  • With a dearth of 787 opportunities, now is a good time to move to the A330neo rather than fight it.

Rolls-Royce

  • This not news that Rolls-Royce wants to hear.
  • But Rolls-Royce has been a wobbly partner for Airbus. Airbus has become too dependent on Rolls-Royce in widebodies and it shows. (Like Boeing and GE)
  • The A380 program failed in part because Rolls-Royce could not get its engine to perform like the GP engine and the primary A380 customer Emirates decided to walk away in favor of the A330neo, among others. Pratt & Whitney may have been able to upgrade a GTF for this but didn’t have the time to get there.

Pratt & Whitney

  • The move by GE is, in part, a strategy to curb any growth in the GTF. The GTF was hot in the running for NMA. Pratt & Whitney was active in pursuing the NMA, which means that they have an engine concept ready to go. Freezing that threat is necessary to protect GE’s flank.
  • But perhaps Pratt & Whitney is too focused on settling the GTF in-service situation. Also, they are chasing the B-52 program hard as well as the F-15X. Military sales are getting more attention.
  • The GTF architecture, despite the wear and tear to date, offers a low-risk growth path for a larger engine.
  • Also, Raytheon Technologies will be digesting Pratt & Whitney which eats up key people’s time and energy.
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Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.

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