The LEAP engine from CFM International is progressing in its initial ground testing, and will culminate in engine in 2015 and entry into commercial service in 2016.  The first leap engine was fired-up on September 4th, and the engine has now reached full power in ground testing at GE’s Peebes, Ohio outdoor test facility.LEAP-FETT-Sept-4-2013_410xThe engine test program will encompass all three LEAP variants, with 28 flight test engines and 32 flight test engines for Airbus, Boeing and COMAC.  Chaker Chahrour, Executive VP of CFM said “in the past five years, we have completed thousands of hours of component testing.  Now we get to put it through its paces in the most comprehensive test program we have ever undertaken.”  Over the next three years, it is expected that the test engines will accumulate 18,000 cycles and near 40,000 hours of operation.

The LEAP will enter service with the Airbus A320neo family, and has also been selected for the Boeing 737 and COMAC C-919.  It competes with the Pratt & Whitney GTF on the Airbus A320 family, and our current count shows a very slight lead, with 801 aircraft selecting LEAP versus 779 selecting GTF.  But with 800 undecided of the 2,380 for the A320neo family to date, it is premature to declare either engine the winner in the order race for the program in which the engines compete head to head.

ChartIt appears that about 1/3rd of the customers are waiting for additional data on fuel consumption, noise, and maintenance costs before making their decision, which means we won’t know the winner in this battle for some time.  But the current 51%-49% market share seems to bounce in either direction based on who wins the latest order.  We expect very strong competition between the two engine markets for the remaining third of the A320neo family orders, using the technique of “pricing to the point of economic indifference.”

This is an art that the engine manufacturers have perfected in recent years by adjusting pricing to account for any variations in performance between competing engines, and make decisions difficult for by basically making the economics between two engines virtually identical.  With decisions for 800 aircraft still undecided, it appears they are succeeding in that regard.

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