Feb. 7, 2023, © Leeham News: Our report last week about Rolls-Royce’s new CEO characterizing the company in dire straits is just part of the story. Shortly before that, on January 18, JP Morgan issued a 38-page dissection of the company that perfectly encapsulates what LNA has pointed out in the past about its commercial engine business.
Jan. 31, 2023, © Leeham News: Rolls-Royce’s new CEO says the engine group is a “burning platform,” failing to give returns.
Tufan Erginbilgic, who joined RR as CEO on Jan. 1, said this is the “last chance” to get its house in order and turn a profit.
The dire outlook has potentially disastrous implications for Airbus. The airframer relies exclusively on Rolls for its engines for the A350 and A330neo. Airbus is monitoring the situation closely. Market sources tell LNA that Airbus is assuring customers and potential customers that Airbus will make sure engines and aftermarket support are available, without detailing how.
An Airbus insider tells LNA that all scenarios are under consideration. Some speculate that Airbus might either provide financial support to Rolls or even, in the extreme, buy the engine company. Others believe either course is unlikely because Airbus has its own production problems to sort out. Its fiduciary duty is to its stockholders. “It’s not their job to inherit a problem that was created decades ago,” one London-based analyst says.
What’s at the root of RR’s current problems? Many of the reasons have been discussed before, but let’s summarize them.
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Dec. 5, 2022, © Leeham News: In September 2020, LNA wrote that commercial aviation was facing a “lost decade.”
The impetus for this prediction was the COVID-19 pandemic crisis.
“Commercial aviation is facing a lost decade due to COVID,” we wrote. “Yes, most forecasts target 2024-2025 as returning to 2019 passenger traffic and aircraft production levels. However, LNA in July published its own analysis indicating full recovery may not occur until 2028.”
Nobody predicted that effective vaccines would emerge as quickly as they did. Drug makers in the US and Europe moved heaven and earth to produce vaccines to fight COVID-19. These have been, by and large, extremely effective. (I’ve had two shots and three boosters and have not caught COVID, despite being at one major conference with 13,000 people.)
China created its own vaccine, which failed to stem the tide there. President Xi quickly adopted total lockdowns at the first sign of outbreaks. Despite this, China is now setting records for new infections. Commercial aviation recovery there remains underperforming. China’s performance illustrates the underlying reasoning we had in concluding commercial aviation was facing a lost decade.
This sector still faces a lost decade, though for some fundamentally different reasons.
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By Bjorn Fehrm
October 20, 2022, © Leeham News: We finish our series about engine development by looking at the next-generation engines and future trends in airliner engine development.
We limit this look forward to engines that burn Jet fuel (Jet-A1 or SAF) as green propulsion solutions are a vast field and justify their own series. We will pick this up at a future date.
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By Bjorn Fehrm
October 6, 2022, © Leeham News: The early years of 2000 saw new engine programs launched for the new Boeing 787 Dreamliner and Airbus response, the A350.
Substantial differences in the life of these aircraft programs made the engine programs develop differently. It was about throttle push or not.
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By Bjorn Fehrm
September 29, 2022, © Leeham News: The 1970s saw the introduction of the High Bypass engine for the medium/long range Boeing 747, Douglas DC-10, and Lockheed Tristar, with Airbus A300 employing an updated variant of the DC-10 engine for medium range missions.
In the following decades, these engines introduced improved technology and matured into new levels of reliability. With the increase in reliability came changes in how long-range aircraft were designed.
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By Bjorn Fehrm
September 22, 2022, © Leeham News: With the introduction of the High Bypass engine for the Boeing 747, Douglas DC-10, and Lockheed Tristar, it was obvious Pratt & Whitney’s low bypass engines on the Boeing 707, 727, 737, and Douglas DC-8, -9 should be attacked with a new High Bypass engine in this thrust class.
French Snecma and GE teamed up to break Pratt & Whitney’s monopoly of the jet engine market outside the widebodies. The CFM56 was born.
Sept. 20, 2022, © Leeham News: Blake Scholl, the founder and CEO of Boom, the start-up company, continued to paint an optimistic picture about the Overture Supersonic Transport.
He told the US Chamber of Commerce Aerospace Summit last week that the Overture, a Mach 1.7 88-passenger aircraft concept, will revolutionize international air travel.
But Boom has big challenges ahead—not the least of which is that there is no engine manufacturer so far that has stepped up to provide an engine. The Big Three—GE Aviation, Pratt & Whitney, and Rolls-Royce—have either outright rejected participation or other priorities exist.
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By Bjorn Fehrm
September 15, 2022, © Leeham News: Last week, we looked at how Pratt & Whitney’s JT8D turbofan came to dominate short-haul airliners while the JT3D had the long-range market.
The introduction of the widebody jets in the 1970s with Boeing 747, Douglas DC-10, and Lockheed Tristar brought GE and Rolls-Royce into the market. It was the start of the high bypass turbofans.
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By Bjorn Fehrm
September 8, 2022, © Leeham News: Last week, we analyzed the change from turbojets to turbofans for civil air transport. The jet engine was developed for high-speed military fighters and was not ideal for subsonic airliner use.
We also dwelled on why the three major engine OEMs came to different solutions for the first-generation turbofans. Now we look at the engine that made turbofans mainstream, the Pratt & Whitney JT8.
Summary