Assessing the impact of new aircraft and engines on the generation of equipment they are designed to replace is a vital exercise for aviation asset managers.
Take, for instance, the CFM LEAP and Pratt & Whitney PW1000G families of engines, both of which have now entered revenue service: How much and how quickly are they going to hit the values and fleet sizes of engines like the CFM56-7B and V2500-A5?
Some lessons can be drawn from history. The CFM56-7B was launched in the mid-1990s, roughly 10 years after the CFM56-3, yet it took another decade until the global -7B fleet matched the -3’s, according to consultancy IBA.
Even then, it was another few years before values for the less-advanced -3 began to decline, so one might argue that -7B values will hold up until the late 2020s.
“Despite strong future growth in both A320neo and 737MAX deliveries, there is a lot of ground to make up before these aircraft, and the engines that power them, outnumber the current generation,” says David Archer at IBA
The consultancy estimates that CFM56-7B numbers will continue to rise in line with those of the 737NG until 2020, and that it may take another four years until its successor – the LEAP-1B on the 737MAX – outnumbers it in service.
That’s good news for maintenance companies, who are now due the long-awaited bow wave of CFM56-7 overhauls that has been delayed by the engine’s surprising reliability. In turn, this will benefit lessors as spare engine demand rises to cope with all the shop visits.
Of course, there are plenty of variables that could undermine some of the above predictions, including: better- or worse-than-expected reliability for new-technology engines; changes to OEM ramp-ups that currently envisage annual output of 4,000 narrowbody engines by 2020; and airline fleet management decisions.
For an in-depth examination of what’s in store for narrowbody engine values, look out for the forthcoming Engine Yearbook.