The world, it seems, is awash with new airliner projects. The manufacturers may be able to afford to launch some of these aircraft and, in some cases, the airlines will be able to afford to buy and operate them - but will the engine makers be able to afford to power them?
There are three major problems for the engine manufacturers: the airframe manufacturers, the customers and the market itself.
The airframe-manufacturer problem is that every manufacturer wishes, naturally enough, to optimise the design and performance of its every offering to the perceived needs of the customer. This means that not only every airliner type, but every sub-variant of every airliner type, needs its own specific engine(s). No manufacturer will accept a standard or universal engine, nor will it accept, one optimised for a competitor's airframe.
The customer not only demands all that of the airframe manufacturer, but something more: wherever possible, the choice of at least two different engines, each of which must at least meet the manufacturer's and customer's expectations on performance. The main reason for this demand is not a desire to spread risk, but merely to exploit the third great problem - the market.
The customer wants engines for the lowest initial price, and for the lowest running cost. The best way of squeezing those best prices out of engine makers is to have a competition between at least two of them for your order. In today's market, the engine maker might not even have a direct hand in this competition. Instead of the customer negotiating first with the airframe manufacturer, and then negotiating with the engine makers over the power plant for its chosen machine, the customer will now often deal only with the airframe manufacturer. Once the airframe deal has been done, the airframe manufacturer then tells the engine maker how much of the total agreed price is for the engines - presenting the latter with a simple "-take it or leave it" option.
The result of pressures such as these can be that the engine manufacturer emerges "victorious" from a competition, clutching an order which, however prestigious it may appear, may be worth less than 20% of the nominal list price of the engines concerned.
In some cases, of course, the customer does not even want to buy engines at all, but merely to rent them on a "power by the hour" basis. That may be attractive to the customer, but not so attractive to the engine maker or leasing company, which ends up taking all of the risk.
All of this means that engine making - especially on a stand-alone basis - is becoming a less and less attractive business for the big manufacturers. In the old days, they could always console themselves that, no matter how much they nominally lost on an engine sale, they could almost guarantee to recover that and more in spares sales. It will not be long, however, before an engine manufacturer proudly announces that one of its engines has stayed on an airliner wing for 30,000h of operation - and an engine which stays on the wing is an engine which is not consuming spares. The engine makers are, in this sense, the victims of their own success in advancing technology.
Without a steady flow of profits from engine sales and spares sales, the engine makers must look closely at any new projects, to see whether they can afford to develop new engines - the days of assuming that all the manufacturers would automatically try to get their engines on every new project have gone. (Anybody who doubts that should look at the experiences of the "big three" engine makers on the Boeing 777, on which the customers are so far the only winners in the engines game.)
If the engine makers do decide not to compete on every project, the airframe manufacturers and customers will have to do some rethinking of their own. The airframers might have to face up to designing airframes around available power plants, instead of the other way round, and the customers might have to face up to treating engines as aircraft power plants instead of bargaining chips. If the loss of that bargaining power worries them, they could console themselves that few customers have suffered from having no engine choice on the Boeing 737.
Source: Flight International
