DBEA55AED16C0C92252A6554BC1553B2 Clicky DBEA55AED16C0C92252A6554BC1553B2 Clicky
May 30, 2024
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The next generation engines are rapidly approaching competitive flight operations – what’s the engine score?  The Pratt & Whitney GTF is already flying for Lufthansa and IndiGo on their A320neos.   The CFM LEAP is rapidly building hours on the Airbus neo fleet and will soon also be operating in customer fleets – the first two operational engines were delivered to Airbus two days ahead of schedule.  The Boeing MAX flight test program is rumored to be running ahead of schedule and should be in service no later than early next year.

These two engine programs may be the largest seen to date in the industry.  Production ramp up is going to be tough for both engine OEMs.  Take a look at the current score.

2016-04-19_8-00-56CFM is way ahead, primarily because of its exclusive role on the Boeing MAX program.  If we compare the two engine OEMs on the neo program, CFM has a much smaller lead at 54% to 46% and there are a number of aircraft orders where engine selection has yet to be made.  CFM has ~63% of its business coming from the Boeing MAX project.  While this exclusivity has been good for CFM, the Airbus neo has outsold the Boeing MAX.  While CFM has clearly benefited, the MAX increasingly looks like a one member program, with MAX8 being the substantially preferred model.  It is not clear how Boeing will proceed to ensure MAX competes better with neo.  But we bet that Boeing will do something as the status quo won’t do.  Comments from Boeing leadership indicate the level of concern.  Given that aircraft programs have long gestation periods, Boeing cannot wait too long before it proposes a solution to eclipse neo and also displace the MAX program.  MAX was born out of a compromise; a stop gap in our view, and we do not see the program having a long life.  So while CFM looks great now, how long this benefit lasts is an open question.  Boeing’s solution to the neo/MAX issue could also be powered by LEAP of course.

While CFM has a commanding lead, P&W has demonstrated an ability to attract aircraft programs.  The P&W program could see growth if its non-Airbus programs pick up orders.  The Bombardier CSeries program has seen a good 2016 so far with one big order (Air Canada) and hopes for another by month end.  If Delta does order 125 aircraft, the GTF backlog grows by 250, or nearly 5%.  Embraer’s E2 should do well, given the success of the E-Jet program, but we probably need to wait until 2017 or 2018 for orders to pick up.  We view IRKUT’s MC-21 program with interest and think it has promise – but politics has hamstrung the project.  Nonetheless, once Russia gets past its political challenges we expect to see orders rise.   Finally, MITAC has a great airplane in the MRJ. But it has been going through teething trouble; its Achilles Heel is weight which keeps it out of play in the US (because of scope clause) where ~80% of its orders have come from.  MITAC should be focusing on sales in other markets, where the aircraft could prove attractive to operators of the larger Bombardier CRJs and Embraer E-Jets.

The engine score may be closer than the numbers indicate.

author avatar
Addison Schonland
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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