Graham Warwick/WASHINGTON DC
The rationale behind General Electric's planned merger with Honeywell has been further reinforced by forecasts of strong growth in the small turbine engine market.
Healthy demand for auxiliary power units (APUs) and a growing market for stand-off missile and unmanned air-vehicle (UAV) engines - capabilities Honeywell will bring to GE - are predicted by analyst Forecast International, which projects small turbine sales worth over $6 billion to 2009.
This is virgin territory for GE, whose smallest engine is the T700/CT7 range of turboshafts and turboprops, which start at around 1,200kW (1,600shp), and whose smallest turbofan is the CF34 family, which starts at 8,500lb thrust (38kN).
In contrast, Honeywell's engine range stops at the 9,000lb-thrust AS900 turbofan and the 1,200kW T800 turboshaft (developed jointly with Rolls-Royce). And the company has a leading position in the APU market, where GE has no presence whatsoever.
Forecast International projects sales of over 41,500 APUs and small propulsion turbine engines from 2000 to 2009, and puts a value on the market of $6.079 billion. Behind its optimism is the confirmed market for APUs on business and regional jets, as well as larger airliners, and the expected demand for engines to power missiles and UAVs.
The auxiliary power unit market is flying high on the tails of the soaring regional and business jet sectors. Whereas APUs are rare extras in commuter and commuter turboprops, they are standard equipment in the latest generation of jets. Here, Honeywell has the dominant position with its RE100 and RE220 machines.
APU sales are also benefiting from the strength of the narrowbody airliner market, where Honeywell faces fierce competition from HamiltonSundstrand subsidiary APIC. Expansion of the widebody airliner market is also a positive factor, benefiting both Honeywell and Pratt & Whitney Canada, which has just been selected to supply its PW901X APU for the Airbus A3XX.
Although overall airliner delivery rates are projected to lessen over coming years, there is no slow-down in prospect for regional jets, and the business jet sector is expected to remain strong for several more years. Add to this foundation the burgeoning markets for stand-off missiles and UAVs and the attraction of Honeywell to GE becomes apparent.
First to react to the emerging demand for small turbine engines for defence applications was Pratt & Whitney, which last year formed the Small Military Engines unit to help bring P&WC's experience to bear on the market for missile, UAV and helicopter engines. Earlier this year, the P&W unit teamed up with small turbine manufacturer Teledyne to pursue the market for UAV engines up to 16,000lb thrust.
Against this powerful combination, a merger with Honeywell looks like an attractive alternative for GE to developing a small engine capability from scratch. It will also present a challenge to other manufacturers active in the market, particularly Rolls-Royce and Williams International.
Williams is the current leader in missile and UAV turbine engines, and has small turbofan and turboshaft products under development with potentially wide military and civil application. Since taking over Allison, R-R has focused development on the upper end of the turboshaft/turboprop market and its smallest turbofan is the 7,000lb thrust-class AE3007. The two companies have cooperated previously, on the 2,000lb thrust-class FJ44 small turbofan.
Source: Flight International
