Companies To Watch at Farnborough
Perceived as less civil aerospace-centric than its Paris counterpart, the industry’s attention on commercial activities at Farnborough typically focuses on the aircraft order battle between Boeing and Airbus. The orderbooks of the industry’s big two generated combined orders and commitments surpassing 900 aircraft at the Paris Air Show last year, and at Farnborough this competition will inevitably be front and center. Given the openness of aircraft manufacturers about their aftermarket strategies, focus on their service activities is growing.
Boeing, with an ambitious target of $50 billion in aftermarket revenues in 5-10 years, has been particularly vocal about the importance of services in its future. After revamping its aftermarket services network in July 2017 with the introduction of its Boeing Global Services unit, the OEM is sure to provide more details about its maintenance vision along with its digital strategy, as Boeing AnalytX also celebrates its first anniversary.
Airbus has also bolstered its services network in the past year, launching its MRO Alliance at Paris last year and new products such as its Skywise data analytics platform. While it may not use Farnborough as a vehicle to make new aftermarket announcements, commercial maintenance appears something of a sweet spot for the Toulouse-headquartered aircraft maker. Earlier this year, Laurent Martinez, who heads up the Services By Airbus division, confirmed that activities in the segment grew 18% in 2016, and another 18% in 2017.
Other aircraft programs may also be of interest to MRO providers. In the regional aircraft segment, Embraer, which will look to push its new E-Jet E2 aircraft at the show, could also make new aftermarket announcements. The Brazilian OEM launched its own unit, Embraer Services & Support in August 2017—a clear sign of services’ growing importance. And on July 5, Boeing and Embraer signed a memorandum of understanding to establish a joint venture comprising Embraer’s commercial aircraft and services business.
The much-anticipated Mitsubishi Regional Jet (MRJ) aircraft, Japan’s first foray into commercial aircraft manufacturing in decades, is set to make its flying display debut at Farnborough. Given that Mitsubishi Aircraft announced three initial aftermarket partners for the program two years ago, Pemco and HAECO Americas in the U.S. and ANA-subsidiary MRO Japan in its home country, more details could emerge at Farnborough about its plans to implement a broader support network for the aircraft—now earmarked for a 2020 entry into service.
Pratt & Whitney and CFM International will likely use Farnborough as a showcase for orders of their respective narrowbody engine types, the PW1000 geared turbofan (GTF) and the Leap. Pratt, which has seen the progress of the GTF stifled by technical issues, is keen to make up ground on its rival, which has amassed more than 14,000 orders and commitments to date. While the competitive nature of the narrowbody engine market is intriguing, the early growth of the aftermarket for both engines is proving equally interesting. In the past year, more repair specialists have expanded their activities around the engines. Lufthansa Technik and MTU Maintenance, part of the original GTF network, announced a joint venture for the engine in Poland at the end of last year, while European provider AFI-KLM E&M added Leap capabilities in early July.
Rolls-Royce, undergoing its own challenges and having announced plans for a restructuring of the business earlier this year, typically uses Farnborough as a platform to announce engine orders, with added commitments for engine services agreements. For new products, attention will be on its Trent XWB variants for the A350 and the Trent 7000 engine powering the Airbus A330neo, expected to be certified in July. Possessing a strong digital focus, the UK-headquartered company is also driving forward with its R2 Data Labs and Intelligent Engine platforms—both launched in the past year.
Based on previous shows, GE Aviation, like Rolls-Royce, is likely to announce new orders for engines with TrueChoice services packages included. Services have proved a lucrative business driver for the U.S. engine giant: It revealed that in 2017, $16.6 billion of its $27.4 billion in revenues emanated from services, with that figure also encompassing defense.
Farnborough also serves as a technology showcase, with the industry penchant for digitally focused innovations reflected at the show in recent years. Consultancy group Accenture predicts that for 2018, blockchain—a list of digital records linked and secured through cryptography—will be one of the big technology talking points. “Expect lots of blockchain buzz at [Farnborough] this year, particularly around how this innovative new technology can help aerospace companies solve critical problems related to the sharing and security of information,” it states. Some of the areas where blockchain can be applied for effective results, Accenture says, are the reduction of maintenance costs, verifying the accuracy of data and managing the industrial supply chain.
Another evolving technology tipped by Accenture is the digital thread. “By linking an asset’s digital twin to the data that asset generates in design, engineering, manufacturing and the aftermarket, the digital thread enables a new level of data sharing and data insight throughout the asset’s lifetime,” Accenture says. “The result: faster and more accurate identification of aircraft data for maintenance upgrades, accelerated deliveries of aircraft to market, and higher-quality products.”