Printed headline: Unwavering Demand
Fleetwide inspection mandates that stem from accidents are never a welcome development, but their results can be reassuring. This appears to be the case with the checks mandated by global regulators following the April 17 engine failure onboard a Southwest Airlines Boeing 737-700 that resulted in one passenger fatality.
Regulators, working from engine manufacturer CFM International’s recommendations, ordered fleet-wide inspections of CFM56-7 fan blades on April 20. Deadlines vary depending on the blade’s age, with the initial batch of 680 highest-cycle engines—those with 30,000 cycles since new—needing checks by early May. The second batch of about 2,500 engines, with 20,000-30,000 cycles, faced a June 30 deadline after regulators advanced the initial target of Aug. 31 when analysis determined that faster inspections were prudent. The rest of the blade population has an early-September deadline. Follow-up inspections must be done every 3,000 cycles, which translates to 18-24 months, depending on aircraft utilization rates. There are about 14,000 CFM56-7Bs in service, and each has 24 fan blades.
Early returns from checks on the higher-time blades has not uncovered a fleet-wide issue. Operators had cleared all blades requiring inspection by the June 30 deadline and 95% of those facing Aug. 31 deadlines, CFM says. The manufacturer, citing the active NTSB investigation into the April accident, is not sharing any findings. Neither the NTSB nor CFM have issued any urgent recommendations stemming from the blade checks. “We have not seen anything that has caused us to change our inspection process,” CFM says.
Some carriers have reported removing and replacing blades, and sending the removed blades to GE Aviation for more detailed analysis. GE and Safran are partners in CFM, and the CFM56-7B is the exclusive engine for Boeing’s 737NG line.
Cracked fan blades have been identified as the root causes of two CFM56-7B engine failures: the one earlier this year and a similar accident in August 2016 that triggered the analysis that led to the fleet-wide inspections. In both cases, the airframes suffered significant damage, believed to have been caused by engine nacelle debris that separated during the engine-failure sequence. While investigators are still analyzing both accidents, one source with knowledge of the probes tells Inside MRO that the likely sequence saw pieces of fractured blade directed forward and upward to strike the No. 1 engine nacelle and cause it to break apart. Debris then struck the wing, fuselage and—-in the most recent accident—a passenger window.
While fleet-wide issues may emerge from the probes, CFM56-7B operators likely face greater challenges driven by market forces. Continued strong demand for passenger lift and the recent rebound for cargo demand—both buoyed by fuel prices that remain in the $70-per-barrel range, compared to $100 four years ago—are pushing operators to fly just about anything they can get their hands on, especially in narrowbody markets. One result is rising demand for 737NGs. Aspiring start-up Canada Jetlines recently switched its fleetplan from 737-800s to Airbus A320s because its lessor partner could not supply Boeing narrowbodies.
The 737-800 is a highly sought-after cargo-conversion candidate, but in most cases market values are still too high to justify the move. Lessor GECAS plans to convert up to 50 of its 737-800s to freighters, eyeing down-the-road opportunities. Since it has the aircraft in its portfolio, it is more focused on long-term asset return.
While 737-800 passenger aircraft are still finding plenty of work, the ramp-up in Boeing 737 MAX and A320neo deliveries soon will begin to push some current-generation narrowobdies aside. Right now, however, demand for parts on the in-service fleet is out-stripping the used-serviceable material market. This is putting further strain on an already active MRO demand environment, as many CFM56-7Bs are approaching their initial shop visits, which typically come after 8-10 years of service.
“These issues are hitting just when we are finally seeing the long-awaited step up in narrowbody engine shop visits,” Canaccord Genuity analyst Ken Herbert says. “As a result, the industry is facing growing turnaround times for engine shop visits, and the scarcity of some narrowbody engine material has become a real risk to the growth in the engine aftermarket.”
Aviation Week’s Commercial Fleet & MRO forecast projects CFM56-7B shop visits will average nearly 2,000 annually through 2027. The peak years will be in 2023 and 2024, when 2,400 annual shop inductions are projected. The least busy year is 2018, with just more than 1,600 visits expected.
Revenue generated from the work will follow a similar pattern, totaling $65.4 billion, with the 2023-24 peak years generating $8 billion each. The geographic breakdown shows North America (30%) and China (20%) generating half of the MRO demand during the decade, followed by Western Europe (19%) and the rest of the Asia-Pacific region (12%).