Rolls-Royce, PW join forces for 120-230 seat engine–and to focus on GTF technology

It is a stunning announcement. Not so much the buyout of Rolls-Royce by Pratt & Whitney from the International Aero Engines partnership. This has been expected for more than a year.

What’s stunning in the new partnership RR and PW announced to develop engines in the 120-230 seat market and to focus on Geared Turbo Fan technology.

AirInsight has a commentary on the tie-up.

This is a major shift in the engine competition and a major endorsement of the GTF engine and techn0logy, creating a more formidable competitor to the dominate CFM International.

We’ll have more to say after we digest this a bit and talk with the market.

49 Comments on “Rolls-Royce, PW join forces for 120-230 seat engine–and to focus on GTF technology

  1. Stunning announcement indeed! Although it was widely expected for over a year, frankly I thought game was over for another IAE collaboration and that PW would go solo with the GTF.

    When you combine RR know-how with GTF technology you should have a very strong engine indeed. They have chosen the best segment in terms of potential sales. The question is at what power will they develop their first engine in that range (120-230) and what will be the first airframe to benefit from it.

    CFM was already facing a big challenge with the GTF. They are now facing an even bigger threat. What’s interesting is that it remains a four player duopoly: GE/SNECMA versus PW/RR.

  2. I see this a bit different. CFMI arrived late to the party offering something less than the GTF. The market was underwhelmed and CFMI was getting their backside handed to them in straight up competition against the GTF engine on the A320neo program. Subsequently, CFMI modified the Leap compressor, fan, coatings, combustor, and turbine. Since those changes were made, engine sales on the A320 have gone overwhelmingly in favor of the Leap. Essentially what CFMI did was erase the efficiency gap so they could offer an engine on-par for economics and at lower (perceived) risk (measured purely in terms of technologies introduced… and who is introducing them).

    The risk issue (real or perceived) represents a real problem for PW. The market segment they are currently offering the GTF in operates on a model which is hyper-sensitive to small differences in reliability. History tells us even small differences in reliability between engine offerings in the single-aisle market will quickly resulted in market dominance by the more reliable engine.

    Today, the GTF remains a relative unknown in terms of reliability. Will the added complexity (IPC compressor, more HPC stages, requirement for variable fan nozzle, indirect planetary gear reduction for the fan drive, higher turbine temps & speeds, etc, etc) result in lower reliability? Nobody knows. But the one thing everybody does know is the reliability of the CFM56-5 today on the A320. It is unmatched in industry, with nothing else even close (it is even better than the CFM56-7 on the 737NG). It is this which is at the recent stall in he market for GTF selections, and I believe this is PW’s credibility issue coming back to bite them. I believe PW has essentially been forced into a partnership with RR, in order to address market concerns about PW’s true potential to make the GTF competitive with the CFMI offering on a reliability basis. It is less about technology than it is about credibility.

    • At this stage nothing indicates that the GTF is not a reliable engine. The flight testing for the CSeries engine went very well. It went so well in fact that they have deliberately extended the flight test schedule to include items that were originally scheduled later on. In other words they are ahead of the program.

      Of course, like for the 787, it’s the in-service reliability record that will tell us how good this other technological marvel truly is. But there is one aspect of the GTF engine where it has a clear advantage over the LEAP: The inherent lower noise level. Because the ratio of the gears allows an increase of the LPT speed 2 1/2 times compared to a standard engine like the CFM, while at the same time reducing the fan speed 3+ times. The net result is that the fan turns more slowly in a ratio of 2 1/2 over 3+. This is a unique feature that can only be found in the GTF technology.

      In the meantime I remain confident in the GTF because so far both ground testing and flight testing have demonstrated a high level of reliability, while at the same time exceeding the original specifications.

      I recognize the risks involved with a bold design like the GTF, but so far PW didn’t have any major issues and that bodes well for the future. On the other hand, on the LEAP they also had to push the technology to be up to speed, so to speak, with the GTF. There are risks involved with the new LEAP technology as well. In terms of performance the GTF is actually a proven engine. Something that cannot be said of the LEAP right now.

      The impression I have is that the reason why the LEAP is so successful with the NEO has more to do with financial considerations and the installed base of CFM operators, than the perceived risks involved with the GTF.

    • The GTF seemingly doesn’t utilise higher temps. The (gtf) gain is from having the LP turbine at a smaller diameter running at higher rpm in a more optimal speeds (gas,bladetips) setting.

      CFMI had to add most of its book of innovations to get its late market share increase.
      ( and some help from the GE leasing arm? )
      Imho this is a step similar to the GE90-115, introduce costly ( manufacture, maintainance ) innovations for superior performance with the major difference that in this case there is a competing or even superior engine available.
      Thus GFMI has placed quite a bit of reputation on the scales to compete against the rather
      conservatively layed out GTF ( the reason why the GTF is attributes with more potential for further improvements and for my recent question how synergetic LEAP and GTF features could be combined )

      The reliability numbers you present are actually an indication that the NG engine has to
      hug the MX “riser” edge closer for achieving similar results to the A320.
      IMHO further indication that Boeing will not be able to reap fully the gains they advertise
      the MAX for.

      Credibility is a fickle asset. Difficult to nurture it is killed easily.

      • You couldn’t resist making this about how bad the MAX will be… how unexpected.

        Here is the PW PR story regarding the GTF:

        1. PW has developed the technology of the future and nobody else is close to having a competitive offering service-ready

        2. The GTF is so formidable, the competition has needed to pull all stops (including financial solutions) in order to be competitive

        You make the case in #4 that the PW PR story is reality, as does Normand in #3. Based on what is known today about the GTF, I think you could make a pretty strong argument these are true.

        Here’s the reality for RR today:

        1. They have been 100% locked out of the next generation of single aisle aircraft. Of the 8 OEM’s developing the aircraft we expect to see in the 90-200 seat market over the next 20 years, not one plans to offer RR engines.

        2. RR does not seem to have a step technology offering close to being ready for the 15K-35K thrust market – at least based on OEM engine offerings.

        You would think this puts PW in the driver’s seat and makes RR desperate to make a move to break in. Your logic would make sense if we saw RR buying their way into a partnership with PW. Instead what we see is PW paying a huge sum of money to be able to share their technology with RR. It only makes sense if RR had something to offer and PW had something to gain.

        The reality is the GTF has major hurdles to overcome, and a big one is PW’s recent reputation in the commercial market. Now that the exuberance of neo orders executed without an RFP or a technical evaluation is over, I believe PW is beginning to feel that pressure from the airlines. I know first hand of several operators who have shied away from the GTF based on reliability concerns. I see this move by PW as a direct response; since credibility cannot be acquired on the spot-market, PW is responding in the only way they can… by adding credibility which already exists.

        I’d be open to understanding it a different way, but I’d reject any suggestion that PW had the world by the tail then paid out in order to bring a competitor to their victory party.

  3. This could be a very exciting times for the new engine that will emerge from this JV. May they be as successful as CFMI has been over the past 30 years.

  4. There must have been massive gnashing of teeth within RR considering how badly they talked about GTF technology before. Incredible market change indeed.

  5. To think RR and P&W were at each others’ throats just a few months ago. I wonder what changed to enable this deal and also why IAE wasn’t maintained as the vehicle for this alliance, between an identical set of partners?

    Some speculations:

    1. IAE is entering its mature, profitable stage. RR give up the ongoing revenues, although they do get compensating royalties. With fewer engines in service, I believe, P&W may need this revenue more than RR for medium term cash flow while they develop and build new engines.

    2. Owning the GTF as the core technology, P&W call the shots. RR is unlikely to get onto narrowbody programs in the foreseeable future without P&W. So, P&W believe that R&R bring enough to the table to make it worth their while to give up half the revenues. I suspect R&R’s contribution is at least as much commercial as technical. Perhaps the relatively slow uptake of PurePower on the A320 NEO has focused minds at P&W.

    3. This JV de-risks open rotor for P&W. If that technology does take off, P&W are on board with a ready made solution from RR. In the meantime they can sell PurePower.

    4. P&W may be able to dump the alliance if circumstances change.

    • IMHO P&W “have been learned” that they need cooperative help and a bit of supervision.
      So #4 would again be a maiming event for P&W.
      This may not give enough restraining effect, they are a US company after all ;-?

      RR do have their own gearbox developement effort going afaik ( targeting OR ).

      GTF from a joint venture was Airbus prefered setup anyway. And they were pretty
      vocal about it.

      What about the possibility that during recent litigation a mutually “full of hurt” situation
      has arisen, forcing a patt that only allows sideways motion onto a joint path ?

  6. See AeroTurgoPower’s analysis. lhttp://aeroturbopower.blogspot.com/

    Does this mean the end of RR’s open rotor program? If so, that complicates A’s recently announced plans for their A320 replacement in 2030, which is to use that engine according to the latest info.

  7. CM :
    You couldn’t resist making this about how bad the MAX will be… how unexpected.

    So what is so different in your observation except that you don’t like to have it presented from others ?

    To reiterate:

    P&W have a nice asset in form of the GTF. It has cost them two legs and an arm to get there
    while shedding reputation left and right. As technology it seems to be “!ripe”.

    CFMI had to add quite a bit in performance to get nearly even (performace) / top (orders) P&W. I would attribute the sales success to good standing and good financing.
    The last couple of percent here will have to come out of the “non ripe” box of magic.
    Going by Mr. Lightsaber ( who seems to know his stuff ) they will introcude some shorter lived solutions initially then replace with trickle down improvements.

    P&W lacks a bit of good standing
    CFMI has currently very good standing.

    My guess is that P&W knows that they need partnering ( as much as possible ) to
    convert this into well founded success ( the current partners have brought them further on
    than their go it alone efforts before )

    Ying and Yang all around.

  8. The key words in the summary from RR regarding the joint venture with PW to develop new engines for future generation mid-size aircraft are: Focus on high bypass geared technologies . This would seem to indicate that the focus will be directed towards first developing a geared turbofan with a two stage counter-rotating shrouded propfan. In this further derivative of the geared turbofan concept, two counter-rotating fan rotors are arranged one behind the other. This arrangement boosts the propulsive efficiency of the engine, with the fan diameter remaining unchanged, and permits bypass ratios as high as 20 to 25 to be achieved (NB: A320NEO GTF Bypass Ratio: 12:1).

    Hence a counter rotating open rotor (CROR) with a cruise speed of Mach 0.78 would be a logical next step for RR and PW if the OEMs were to develop slower cruising NB replacements with EIS in the early to mid 2030s.

    IAE and PurePower partner MTU:

    2025: Geared turbofan with counter-rotating propfan.
    http://www.mtu.de/GB_2007_en/101.0.html

    If Airbus in, say 2020, would decide to delay the NGSA by another decade, perhaps the neo could be re-engined mid-decade with a two stage counter-rotating shrouded propfan BEO (Better Engine Option) sharing the same 81″ fan diameter with the PurePower PW1100G engines.

    Finally, a real “shocker” would be if PW would take a, say 20 percent share, in a 97000lb thrust Trent-XWB outfitted with a geared turbofan. If said engine could even incorporate a counter rotating shrouded propfan and if such an engine could be developed in a reasonable timeframe, perhaps Airbus should delay the A350-1000 by another couple of years… 😉

    • The counter-rotating and CROR engines are extremely noisy, but do promise much better SFC and higher thrusts vs. a similar sized turbo-fan high by-pass engine.

      The GE-36-UDF was very noisy, even though, IIRC it was selected for the stillborn MD-94X airliner.

      The An-70 is powered by the Progress D-27 engine, which as I understand it is as noisy as the conter-rotating turbo-prop Tu-95 Bomber.

      Most of the noise comes from the blade tips as the go supersonic. Maybe someone has come up with an engineering idea to quite these engines.

      • In turbofan engines, the larger the fan diameter, at the same optimized blade tip speed, the slower the rotational speed. Hence to keep the open rotor blade tips below the speed of sound, cruise speed will have to be reduced.

  9. CM :
    You would think this puts PW in the driver’s seat and makes RR desperate to make a move to break in. Your logic would make sense if we saw RR buying their way into a partnership with PW. Instead what we see is PW paying a huge sum of money to be able to share their technology with RR. It only makes sense if RR had something to offer and PW had something to gain.

    I am still trying to make sense of the PW buyout of RR’s existing share in IAE. The only answer I came up with is that RR is strapped for cash right now. They have been bleeding money like crazy on the A350 and A380 lately. And like you have pointed out yourself CM, they have been less than successful in other segments of the market.

    On the other hand RR wants to secure it’s future and that is why they came up with this new and very promising partnership. In the process they have also satisfied an earlier wish from Airbus.

    • The sense is simple. The PW1000G family is in essence the IAE consortium without Rolls. By buying out Rolls, Pratt can simply and seamlessly make the claim that the PW1000G is the natural follow on to the V2500, and all attendant support structure remains the same. One of the advantages that CFMI has is that the Leap is the follow on to the CFM-56, customers with CFM engines will tend to stick to CFM. Pratt needed to do something to convince V2500 customers to do the same thing. Rolls stood in the way until now.

      • Yes, I agree with you Howard. I was slowly coming to the same conclusion after reading Scott’s follow-up thread. Initially it was stunning news. Now it’s all falling into place.

    • “They have been bleeding money like crazy on the A350 and A380 lately. ”

      What about the 787? That should actually be at the top of your list.

      • Yes, absolutely. I should have mentioned the 787, not only for the development costs, but also the long delays that have postponed the much needed revenues to cover those costs.

        What I had in mind when mentioning the A380 was the Qantas incident when they blew an engine that nearly destroyed the wing. And Airbus pushing for a more powerful version of the XWB for the A350-1000.

        RR remains a healthy company but they are spending a great deal of money on several programs simultaneously. But the large quantity of A350 and 787 already sold should help them to recoup their investment eventually.

  10. FF :
    This JV de-risks open rotor for P&W. If that technology does take off, P&W are on board with a ready made solution from RR. In the meantime they can sell PurePower.

    I don’t see why PW would be much interested in the open rotor. That technology is very noisy and will always be. Even if in a distant future they were able to bring the noise down to present day standards, that would put them behind before they have even started.

    The GTF is the antitheses of the open rotor. As they increase the gear ratio the engine only gets quieter. That is a genuine breakthrough, considering both the actual and future requirements in terms of noise reduction.

  11. Actually, I rather see this as a capitulation from Rolls. In essence they have said “I will gladly take a payment from you today, for a promise of a cooperation 15-20 years from now”. Of course, it is only pure speculation that such cooperation will happen, it is a long way in the future. Secondly, this deal only gives Rolls a near term financial prop, which of course was desperately needed to shore up the balance sheet. By the time it becomes necessary to actually do something on the next engine program, Pratt and Rolls will have to decide if this stale, mouldy agreement will still be worth eating.

    Pratt does not need Rolls, Rolls needs Pratt. Rolls has ceded the mid size airplane market to Pratt and CFMI. Even Pratt’s consortium for the GTF is essentially IAE with out Rolls. Rather like getting a band back together, but with out the annoying bass player.

    • You have a rather pessimistic view of RR’s position: “Capitulation”; “it is only pure speculation that such cooperation will happen”; “stale, mouldy agreement”; “Pratt does not need Rolls”; “annoying bass player”.

      I agree with you that they desperately needed to shore up the balance sheet. But with this new deal RR has also created an astute way out of an embarrassing situation for all parties involved: RR, P&W, other IAE members and principally Airbus.

      My understanding is that they will start cooperating on this new endeavour immediately, or as early as practical. And as far as I am concerned it’s a win/win/win/win situation for P&W, RR, IAE and Airbus.

      • Yes, I do tend to be rather pessimistic about these things. Never underestimate the overriding greed of corporate executives to “take the money now and hang the future”. Especially when it is such a long term thing such as 15 to 20 years from now, when not one of those executives will be around to face the consequences of their actions. We have seen it time and again in companies large and small.

        I have yet to see anything concrete indicating that this engine cooperation is actively, physically, an d substantially starting any time soon. If you have contraindicating information, please share. I would rather like for this to turn out well, but as they say once bitten, twice (or thrice or four times) shy.

      • PW had zero motivation to go do this unless there was a serious problem to solve… they already had the “engine of the future” developed, and it was already selected to fly on 4 of the most promising aircraft of the next decade. You don’t pay out to share your technology with a competitor unless there is something structurally wrong with your business.

        By joining with RR, PW gains the much needed credibility of a company which has not had serious and recent program failures (I’m not talking about engine events, I’m talking about failures to materially deliver on core customer expectations, such as having an engine ready in the same half-decade it was promised). It also gains a partner which has all the technology in-house which is needed to complete a world-class engine. PW clearly does not possess this on their own.

        To Uwe in #4 – By temps, I’m talking in a relative sense. The GTF has higher gaspath temps than the LEAP (compressor, HPT & LPT). The Leap did increase temps when it improved its fuel burn, but still runs at lower temps than the CFM56 does today, and with improved materials and increased cooling. Retention on the Leap is improved relative to the CFM56.

  12. CM :
    By temps, I’m talking in a relative sense. The GTF has higher gaspath temps than the LEAP (compressor, HPT & LPT). The Leap did increase temps when it improved its fuel burn, but still runs at lower temps than the CFM56 does today, and with improved materials and increased cooling. Retention on the Leap is improved relative to the CFM56.

    Better sfc with lower temps goes a bit against my engineers “pant seat feeling”.
    Do you have some reference reading resource for this?

    apropos:
    The GTF already is a cooperation. though the “significant others” are a bit
    below the horizon here ( in most discussions anyway ).

    • You’re not wrong: generally speaking, higher gaspath temps are required to achieve the better TSFC. I’m making a distinction between gas and component temps, as the latter directly counters overall engine efficiency via reduced retention. Data I’ve seen from both engine manufacturers indicates both are running higher gas temps than today (actually, the LEAP runs lower gas temps than the GEnx), but only the LEAP has demonstrated lower component temps than the CFM56 at hotter gas temps – CFMI gets there via coatings and cooling. The data from PW indicates higher airfoil temps, but they claim the materials (exotics) address the retention concern. My view is PW is taking a high risk approach to retention, possibly risking too much retention to gain TSFC in the view of some operators. Only time will tell. The details I’ve seen are not public.

      • I could have added. Access to better materials and better cooling technologies is something PW will get out of the deal with RR.

      • OK, we have 3 ( probably more ) major variables to “work” efficiency.:
        A: Propulsive : swap mass and delta v
        limit : bigger fan : more drag, reduced rpm

        B: thermal/pressure : all carnot factor related:
        . . . increase pressure ratio for better efficiency
        . . . higher pressure ratio gives automatic higher gas temps
        limit: gas losses, combustor and HP turbine materials maxtemp

        C: aerodynamic: reduce turbine diameter for higher more optimal mach numbers ( this is the enabler on the GTF )
        additionally the weight goes down for the turbine section
        and higher rpm probably allows lower bladecount.
        ( Lost by adding the gearbox ;-?
        in a nongeared setup there is a pronounced limit to turbine versus compressor/fan diameter.

        My current understanding is that the GTF as tested is a conservative core that currently draws most gains from item C.
        ( Thus my repeated question on how synergetic GTF + LEAP or otherwise sourced A and B improvements could be and why i think that MTU is an enabling partner for PW)
        And the reason why the GTF is generaly judged to have more potential for further improvements.

        In contrast CFM works “B” on the LEAP.
        The last percents they had to add to make the scale come even is said to hug the bleeding edge much more tightly.
        ( With a (later added) CMC turbine in the mix. )

        aside: your reliability / MX data would indicate that already the
        737 engine compensates a partly lack in “A” with more “B”

        How much further increase in bypass ratio would the conventional setup ( ungeared) allow?

      • A bit of dripping in sentence by sentence, sorry.

        Going through the Bernstein stuff my impression is that
        you have bought into the higher risk / lower risk gambit
        initiated by CFM. This may be similar to the Dreamliner
        “super statements” going down hook, sinker and line
        ( for a while only ).

        I think I can stay with my position that PW+pp has the
        more “interesting” product but with the coals added by
        CFM recently needs either a bigger delta to the LEAP
        and/or a bit of reputation bolstering which IAE2 with
        inclusion of RR would provide.

        Same as Airbus needed a range of much better products
        to surmount the entry hurdle and grow into their current
        place.

  13. CM :
    CFMI gets there via coatings and cooling. The data from PW indicates higher airfoil temps, but they claim the materials (exotics) address the retention concern. My view is PW is taking a high risk approach to retention, possibly risking too much retention to gain TSFC in the view of some operators. Only time will tell. The details I’ve seen are not public.

    PW’s solution might be more risky in terms of durability, but on the other hand it could also be more reliable because it uses passive means, like exotic materials, where CFMI chose the more complex solution of active cooling. I would say there are risks on both sides, but a different set of risks.

    • The difference being one is proven, having flown millions of revenue flight hours (active cooling) versus the other which can only be substantiated today by saying “trust me” and “we’ve tested it”. As I mentioned, this is an area where Rolls can add real-world experience with exotics at higher temps (Trent 900/1000) into PW’s technology toolbox.

  14. CM :
    PW had zero motivation to go do this unless there was a serious problem to solve…

    By joining with RR, PW gains the much needed credibility of a company which has not had serious and recent program failures (I’m not talking about engine events, I’m talking about failures to materially deliver on core customer expectations, such as having an engine ready in the same half-decade it was promised). It also gains a partner which has all the technology in-house which is needed to complete a world-class engine. PW clearly does not possess this on their own.

    These two quotes contradict each other. In one sentence you say PW had zero motivation and in the other you explain, very well, the various motivations they had.

    I think this deal makes a lot of sense for both, PW and RR. The latter gets a substantial some of money and an ideal partner for developing new products, while clearing itself from an unsustainable position. The former gets access to unique commercial aircraft engine technology, while solving an urgent business issue.

    I would also expect to see MTU joining the new alliance. RR is interested in the GTF technology, where MTU plays an essential part.

    • The statements do not conflict; you have to read the whole sentence: “PW had zero motivation to go do this UNLESS THERE WAS A SERIOUS PROBLEM TO SOLVE”

      I’m very much of the opinion PW is in way over their head. As we’ve seen from recent experience with RR and GE, having an engine flying, certified, or even in service does not mean there are not significant operating and performance challenges remaining to be solved. I am of the opinion the PurePower engine had absolutely run into a wall with regards to meeting spec (not necessarily SFC – Remember, anyone can push TSFC way beyond where it is today – the problem is retention), and buying access to RR technologies, while convenient at the moment for Rolls from a financial standpoint, was absolutely essential for Prat from a technology standpoint.

      I believed this before this deal was announced. If you want to look at it in terms of means, motive and opportunity. I’m just making sense (in my own mind) of the motive. Others are free to read it however they choose.

      • You seem to be in a better position than most of us to asses the situation. Yet, I remain totally surprised by your statements about PW in regards to the technological challenges they are facing.

        You employ strong words like “serious problem to solve”; “PW is way over their head”; “the PurePower engine had absolutely run into a wall”; “was absolutely essential for Pratt”.

        I may have taken these small quotes out of their context, but they still demonstrate a degree of partiality against PW, a bit like Howard against RR.

        PW is now far away from the glory days when they were hanging on just about anything with the name Boeing on it. They have elected to concentrate on the military side but they have not been completely inactive on the commercial side either (IAE, EA). When I read your comments about PW, it’s like if Lockheed was trying to make a comeback in the commercial aircraft business!

        Speaking of comeback, the GTF has all the attributes of a technical, commercial and industrial triumph. They may have run into some technical difficulties, but who doesn’t? Besides, they are still a dominant force in the military engines business. I am sure they could use a bit of that knowhow on the commercial side.

        PW needed MTU to develop the GTF and now RR needs PW to develop the next generation of small engines. Just like GE and Snecma need each other to develop the LEAP. It’s what we call international cooperation.

  15. Normand,

    Your point is well taken – I don’t want to sound anti-P&W. My concerns about the GTF are not personal. In reality, I’d like nothing better than for Pratt to be a world-class technology leader. The irony with me picking on the GTF is that for a lot of reasons, including sentimental, I’d prefer for PW to dominate both GE and Rolls (I fly a Wasp powered DHC-2 for leisure). The problem is, I just don’t believe PW claims about the GTF.

    In addition to PW’s numbers just not lining up (as expressed in previous posts), there is plenty of circumstantial evidence as well… More successful engine companies, with demonstrated technology leads over PW (namely, GE & Rolls) have each experimented with geared turbofans, going all the way back to the early 1970s. The technology is not new and the GTF architecture is neither unknown nor beyond the capability of anyone else in the business. Despite better demonstrated technologies than PW in virtually every area (oil systems, gaspath analytics, airfoils, cooling, coatings, materials, combustors, etc), both GE and Rolls continue to shun the GTF architecture (Rolls suddenly having a change of heart in light of a lot of timely cash thrown their way).

    My view is PW is trading on-wing life for SFC gain in a no-holds-barred attempt to break back in meaningfully to the commercial world. There is rumor this is what kept them off the 787 – I’ve heard PW offered Boeing a better SFC solution than either GE or Rolls, but Boeing couldn’t stomach the built-in risks. It’s not likely we’ll ever know if that’s true, but statements by Boeing at the time of engine selection were very flattering to the performance of the PW offering.

    Anyhow, I’m afraid this has turned into the ramblings of an old man. Bottom line is this: I’d love PW to succeed and get healthy again, but I don’t see GTF being the magic elixir.

    Cheers!

    CM

  16. Uwe, Re. #30

    You ask a great question; What is the bypass ratio potential with a direct drive propulsor? I’d suspect the Leap on the A320neo is close to what’s practical at today’s core/LPT efficiency, but I really can’t say with any certainty. A second related question is how much bypass ratio can you go to by any means (GTF or otherwise) before lapse rate forces your engine to be sized by cruise thrust. Once you reach that threshold, your core begins to grow again and your SFC trend reverses. I’d need to see more details on the GTF relative to the A321 L/Dmax and cruise thrust requirements, but I suspect the GTF on the A321 is pretty close to that crossover point.

    In my mind, that’s all good news. It means we have pushed both architectures right to the current limits of their sizing potential (in terms of BPR). To move past that threshold, aircraft will need to get more slippery, or we’ll need a new engine technology to help us further grow BPR without reversing efficiency.

  17. Uwe :
    Going through the Bernstein stuff my impression is that
    you have bought into the higher risk / lower risk gambit
    initiated by CFM.

    You’re assuming I like the Leap 🙂

    From my vantage point, it doesn’t take a rocket scientist to figure out which offering is higher risk. The folks who believe it’s the relatively conventional LEAP are the probably the ones lapping up the engine company PR.

    History is a pretty good barometer to substantiate my suspicions: The CSeries, MS-21 and MRJ have all seen tepid sales with only the PW1000G offered. GTF sales on the A320neo were brisk at the start, but that was when there was a large fuel burn discrepancy between the GTF and the Leap and when CEO’s were peeing themselves to make a splash at airshows. Now that the two engines have pulled essentially even in block fuel (According to Airbus the GTF still has a small fuel burn advantage), and now that airlines are doing evaluations before signing MOUs for the new airplanes, Pratt has all but been shut out by the Leap. When a publicly held carrier with a proven track record of good technical evaluations selects the GTF, this conversation will get a lot more interesting. Until then, if I’m the one feeding on the PR, I seem to find myself in very good company at the trough!

    • Harumpf,
      “nobody has ever been fired for buying IBM”

      Another indication that the market is more about feeling and reputation than anything else.
      The rational aspect is about defendability of a decission and later liability protection for management. ( Look at how long Alan Joyce holds up with “by the book” bad decissions )

      This is a sidetrack: My impression on higher leasing and resale value for the Boeing NB family is more a result of effects as described above and pronounced shimmering from the leasing companies ( for the airlines they replace lack of standing with cost ).
      Boeing panders much more to leasing corp. needs a market ecology similar to Microsoft.

    • Let’s look at a couple of those CFM deals, CM.

      *GECAS buys only from GE/CFM, so PW never had a chance on this purchase.

      *Republic said in an 8K SEC filing CFM offered great incentives on the LEAP and restructured existing maintenance contracts for the CFM56. GECAS restructured Frontier’s Airbus leases. This was a GE family bailout of Frontier that PW had no ability to match.

      *Virgin America’s David Cush said GTF was ahead until the last minute when CFM offered greater economic terms.

      Those are just three where there is public information.

  18. Uwe :
    Boeing panders much more to leasing corp. needs a market ecology.

    Where do you get this stuff? Ask anyone in the leasing world and they’ll tell you Boeing is loathe to sell to the lessors, only recently changing their approach on the 787; almost as if they have viewed lessor placement of aircraft as competition in the market. As the percentage of aircraft owned by lessors has tippled over the last couple of decades, it’s a widely accepted fact Airbus has been much more ready to accept their role in the marketplace the Boeing.

    • The last time we did an analysis, shortly after the first of this year, we found the backlogs of Airbus and Boeing to lessors were within one percentage point of each other.

    • “Where do you get that stuff?”

      A feeling. A certain taste. I can’t put anything tangible forward for this.
      ( I wouldn’t give much on Boeing ( or Airbus at that ) public positioning.)

      My general impression is that the leasing entities have encroached on
      profits from productive work just like the banks have in production
      environments. Lending money around is nonproductive but very profitable.
      this is in all essence a bad developement ( proof in the pudding, see the
      recent crashes and market ailings ).

      • We’re in agreement there. Anyone taking money out of the system without adding materially to productivity of the “system” are little more than parasites within the process. With interest rates where they are, the bloodsucking is minimized, but when prime rates recover to something closer to historical norms, the consequence of non-productive elements is amplified. Not good for the business at all, but seems to be a necessary evil in a very cash constrained environment.

  19. CM :
    Not good for the business at all, but seems to be a necessary evil in a very cash constrained environment.

    There actually is no cash constraint.
    Excess liquidity was at the root of all the bubbles we saw recently.
    Only this money expects to make exorbitant profits suckered on by what the money launderers make.
    Productive processes burdened by expensive credit just can’t compete in this market.

  20. CM :

    We’re in agreement there. Anyone taking money out of the system without adding materially to productivity of the “system” are little more than parasites within the process. With interest rates where they are, the bloodsucking is minimized, but when prime rates recover to something closer to historical norms, the consequence of non-productive elements is amplified. Not good for the business at all, but seems to be a necessary evil in a very cash constrained environment.

    Uwe :

    CM :
    Not good for the business at all, but seems to be a necessary evil in a very cash constrained environment.

    There actually is no cash constraint.
    Excess liquidity was at the root of all the bubbles we saw recently.
    Only this money expects to make exorbitant profits suckered on by what the money launderers make.
    Productive processes burdened by expensive credit just can’t compete in this market.

    I don’t know what any of this has to do with the subject at hand but knock it off.
    Hamilton

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