Pratt, GE battle over billions in jet engine orders

Tue Feb 18, 2014 7:22am EST
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By Lewis Krauskopf

NEW YORK (Reuters) - 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.   Continued...

General Electric employee Jim Jones assembles a GE90 engine at the GE Aviation Peebles Test Operations Facility in Peebles, Ohio, November 15, 2013. REUTERS/Matt Sullivan