Pratt & Whitney is seeking to combat General Electric Aircraft Engines' growing dominance of the powerplant maintenance market with the launch of its own scheme to secure a major slice of the business.
The US engine maker is offering airlines a "thrust-manager" deal covering the entire life of their engines. The scheme is part of a plan to double income from its engine overhaul business to 30% of total sales over the next five years. P&W's repair business now amounts to only about $500 million a year - a minor part of its $2 billion aftermarket activities, which traditionally have been dominated by spares sales, particularly on the JT8D engine.
P&W large commercial engines president Robert Wolfe says that the "thrust-manager" scheme would provide a "guaranteed, fixed cost" for an airline's propulsion requirements over the life of an engine. P&W would handle "all aspects of an airline's propulsion needs", he adds, with potential cost savings to the carrier of "-up to 25%, if it took full advantage of the scheme".
Wolfe says that the idea fits in with the concept of the "virtual airline", which he says "-will be with us very soon". It would, he says, give airlines "predictability" in their spending plans by spreading purchase and overhaul costs of engines over their lifetime. He says that the scheme could cover any engine types in an airline's fleet.
Proposals are being made to several airlines, including British Airways, Swissair, Singapore Airlines, the major US carriers and "several other important potential customers", says Wolfe.
Only partial overhaul deals have been signed to date, including one with Delta Air Lines for inventory management of its PW2000s and another with Airbus Industrie for the maintenance and overhaul of all aircraft owned and leased by the consortium. "We've broken new ground, and expect to tie up significant contracts in the near future", says Wolfe, who was at the opening of a new P&W office in Paris on 30 April.
The company has previously left most repair and overhaul work to customers and third-party operations. Estimates suggest that it handles only about 15% of its in- service engine base, compared with a figure of 60% at GE. Overhaul and spares have become increasingly important as prices for new engines have been under pressure.
P&W and rival Rolls-Royce have been left standing by the rapid expansion of General Electric Engine Services into the lucrative maintenance market. A series of acquisitions, culminating in the purchase of Greenwich Air Services, has resulted in GE sitting on an overhaul and spares business with sales of $4.5 billion if the deal is approved. In 1996, it contributed 75% of GE Aircraft Engines' $1.2 billion operating profit.
Source: Flight International
