Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: Air Transport’s route to 2050. Part 5. January 17, 2025
- What’s the future of the Boeing 787-8? January 16, 2025
- FAA understaffing affects air operations oversight; NTSB falls short, too January 13, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 4. January 10, 2025
- The market is ready for a 787F. But is Boeing? January 9, 2025
Pontifications: Engine makers’ business model needs overhaul
By Scott Hamilton
May 2, 2023, © Leeham News: The business models for engine makers for decades have been simple: deeply, deeply discount the engines on the sale and make up the revenue and profits on the maintenance, overhaul, and repair (MRO) contracts.
It’s a model that’s served engine makers and customers alike well. Customers save millions of dollars on the upfront purchase of airplanes. The engine companies win market share.
There are downsides for the Original Equipment Manufacturers (OEMs), though. The discounts typically are steeper than those offered by Airbus and Boeing (and Embraer and ATR). LNA has seen deals with discounts as steep as 80% on the sales price. We’ve even seen one deal in which the OEM gave (as in free) the engines in exchange for the MRO contract.
The big downside to this is that it can take 10-12 years, or more, for the OEMs to recover their research and development and production ramp/learning curve costs. Then as the CFM 56 matured into perhaps the most reliable jet engine ever, with more than 25,000 hours on-wing, followed by the IAE V2500, MRO services contracts didn’t return the revenue and profits as quickly as before.
Bjorn’s Corner: New aircraft technologies. Part 9. Engine core advances
By Bjorn Fehrm.
April 21, 2023, ©. Leeham News: This is a summary of the article New aircraft technologies. Part 9P. Engine core advances. The article discusses how developments for the next-generation airliner engine cores will increase the thermal efficiency of next-generation engines.
Figure 1. The Pratt & Whitney PW1100G engine with its compact core enabled by a geared high RPM design. Source; Pratt & Whitney.
Bjorn’s Corner: New aircraft technologies. Part 9P. Engine core advances
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By Bjorn Fehrm
April 21, 2023, ©. Leeham News: This is a complementary article to Part 9. Engine core advances. It discusses in detail the next-generation propulsion system cores and what efficiency improvements to expect from different technological advancements.
Pontifications: One “good” engine in future for RR, faulty business strategy and model: JP Morgan
By Scott Hamilton
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.
Pontifications: New Rolls-Royce CEO paints a dire picture; all scenarios on table at Airbus
By Scott Hamilton
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.
Pontifications: A lost decade for new airplanes
By Scott Hamilton
Subscription Required
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.
Engine Development. Part 10. Next generation engines
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By Bjorn Fehrm
Introduction
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.
The Boeing 777-9, the first airliner with next-generation engines. Source: Boeing.
Summary
- The major reduction in fuel consumption and, thus, CO2 emissions will come from new engines.
- The technologies to drive fuel consumption down a further 15% are there.
Engine Development. Part 8. Throttle push or not?
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By Bjorn Fehrm
Introduction
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.
Summary
- The Dreamliner engines changed as the 787 programs went through many stages.
- The Airbus A350 program was a standard program in comparison.
Engine Development. Part 7. Engine reliability changes the aircraft market
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By Bjorn Fehrm
Introduction
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.
Figure 1. The Boeing 777-200 was introduced by United Airlines in 1995. Source: Wikipedia.
Summary
- The engine development after the introduction of the high bypass turbofans in the 1970s focused on reliability and higher efficiency rather than new design principles.
- The change in reliability made the two-engined long-range aircraft the winner over three and four-engine aircraft.
