By Scott Hamilton
Exclusive: Dec. 21, 2021, © Leeham News: Pratt & Whitney and Embraer agreed to suspend further development and production of the PW1700G for three years, LNA learned.
PW and Embraer did not respond to inquiries. Separately, the aerospace company MTU reported earlier this year that it wrote off its entire investment in the PW1200G and expects no revenue from the program in the future.
Update: P&W provided this statement Dec. 22: “As already informed to the market, Embraer and P&W are evaluating E175-E2 program timing given market conditions and scope clause.“
The engine was developed for the Mitsubishi MRJ. Development of the MRJ90 and follow-on MRJ70 were refined to the M100 SpaceJet when analysis concluded the MRJ90 wasn’t economically competitive with the E190-E2. A myriad of technical flaws also was discovered in the flight test vehicles that rendered the original design uncertifiable.
Mitsubishi Heavy Industries indefinitely suspended the SpaceJet program in 2020. Embraer rescheduled the entry-into-service of the E175-E2 from 2021 twice, now targeting EIS for 2025. This depends on US pilot unions relaxing an airplane weight restriction in the labor contracts. The E175-E2 weight exceeds that allowed in the contracts.
MTU Aero Engines gave up on the PW1200G in 2020. In its Annual Report issued this year, MTU reported that it wrote off its entire investment in the PW1200G (plus a portion of its investment in the GE9X developed for the Boeing 777X). MTU didn’t break down the write-off between the two programs.
“MTU recognized impairment losses totaling €73m,” MTU wrote. “The value in use calculated for the program stakes attributable to the OEM segment was €100, for the GE9X and €0 million for the PW1200G. Determination of the value in use requires forecasts, especially regarding the expected revenue over the entire lifetime of the program.”
Although demand for the 777X is down sharply for the original business plan set forth by Boeing and GE Aviation, MTU still expects to recognize revenue from this engine.
“For the GE9X, MTU forecasts revenue of €9.8bn, while no further revenue is expected for the PW1200G program. Furthermore, it is necessary to assess the gross margin from the programs for valuation purposes. For the GE9X the estimated average gross margin over the program lifetime is 21%.”
MTU’s outlook suggests that Pratt & Whitney will at some point terminate the PW1200G program. As for the PW1700G on the E175-E2, more than 800 orders were placed for the E175-E1. Whether the E2 version would reach this number of sales is anyone’s guess. But without a viable US market, there is little prospect for the future of the E175-E2 and the likelihood the M100 SpaceJet program will be restarted is remote at best.
Effectively blocked by union Scope Clauses from selling the E175-E2 in the US market, Embraer currently relies on the aging E175-E1 to refresh US airline fleets and for growth, whenever the COVID-19 virus is defeated.
But this is a solution with an end in sight. Along with Boeing’s 767F and 777F, the E175-E1 is powered by older technology engines that won’t meet 2027 emissions standards adopted by ICAO, the International Civil Aviation Organization. Although member countries are the ones to enforce the standards, they typically do so. Aircraft/engine combinations that do not meet the 2027 standards can’t be produced from 2028. Update: Embraer advises the E1 does meet ICAO 2027 standards.
Correction: The original post misstated the engine designation for the Embraer E175-E2 engine as the PW1200G, which is for the Mitsubishi SpaceJet. The E175-E2’s engine is the PW1700G. The designations have been corrected.