As the next generation of narrow-body airplanes takes to the skies later this year, makers of the new fuel-efficient engines that power them are battling for market share.
Orders worth $20 billion are up for grabs in the competition between Pratt & Whitney and CFM International. Pratt also stands to gain market prominence as it makes what some experts describe as an industry comeback.
Pratt, a unit of United Technologies Corp and a major military contractor, has had a smaller commercial engine market presence in recent years.
In contrast, CFM, a joint venture between General Electric Co and Safran, has supplied the dominant engine on narrow-body, single-aisle planes, which are the best-selling Boeing Co and Airbus Group models.
Single-aisle planes make up more than 60 percent of all commercial jets flying today, and are expected to account for 70 percent of the 35,000 new commercial jets delivered over the next 20 years, a market worth nearly $2.3 trillion.
Jet engine sales are expected to top $500 billion over the next decade, according to the Teal Group, an aerospace research firm. Manufacturers fight hard for sales because a large installed base of engines yields big profits later through maintenance and replacement parts.
While Boeing's 737 MAX and the Airbus A320neo will have aerodynamic improvements that make them more efficient, the new engines account for most of their fuel savings.
Pratt and CFM have promised at least 15 percent lower fuel use than current-generation engines.
"The most significant change on either of these jets is the engines," said Will Alibrandi, an aero turbine analyst for Forecast International.
FOCUS ON NEO
That means airlines will scrutinize the engines' performance and their choice will show in the A320neo competition.
CFM has already sewed up a swath of the single-aisle market for its LEAP engine. CFM is the only engine option on the 737 MAX, the A320neo rival, a deal that keeps CFM as the top engine supplier in the single-aisle category.
But Pratt's new power plant, known as the geared turbofan (GTF), the other option on the A320neo, aims to challenge CFM's dominance.
Pratt also has signed exclusive deals to supply the GTF to four regional jet makers, including Bombardier Inc and Embraer. While each is much smaller than the 737 and A320, those jets combined will represent significant sales over time.
The A320neo has so far won more orders than the 737 MAX, making it a big market opportunity for Pratt.
And Pratt already is proving to be