The world’s most popular jet engine will continue to dominate the commercial aircraft power market into the mid-2020s, according to Rob Morris, head of consultancy at Ascend.
Morris made the prediction in the opening session of the MRO Network’s Engine Leasing, Trading & Finance Conference this morning (June 25).
In his overview of the engine leasing market, Morris outlined Ascend’s predictions for what the global engine fleet will look like in 10 years’ time. Currently, 39 per cent of the 49,000 jet engines installed on commercial aircraft are CFM56s and 11 per cent are V2500s.
Over the next 10-15 years, as the current record backlog of 11,000 aircraft orders are delivered, that engine mix will evolve and diversify as new turbofan engines reach customers.
However, Morris predicts that it will not be until 2027 that CFM’s Leap overtakes the CFM56 as the market leader, and Pratt & Whitney’s PW1000G takes a significant share of the market.
This would seemingly give MROs enough time to consider how they will go about ensuring their place in what will be a highly competitive maintenance market.
With 80 per cent of an engine’s potential revenue stemming from maintenance services and 90 per cent of an engine’s worth tied to its condition, all parties want to make sure that they are getting the best value from their maintenance contracts.
Power-by-the-hour contracts offer predictable costs for airlines and stable income streams for those offering support, so it’s no wonder that OEMs are looking to take an increasingly large slice of the MRO pie.
Where does this leave the independent MROs?
Perhaps more will follow MTU Maintenance’s lead and move into engine leasing.
It does seem like a natural fit. MRO firms have all of the technical expertise to appraise and maintain engines in house, and engines are high value assets that maintain their worth over a long period of time – reconditioned engines are nearly as valuable as those coming off the manufacturing line.
And, as Morris predicted this morning, with the number of commercial aircraft in our skies set to double by 2032, the market for engine leasing, while niche, is expected to see healthy levels of growth.
Perhaps it’s a more healthy option than competing with OEMs for engine MRO contracts?