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Engine OEMs Grab Aftermarket Share

Engine makers sign a steady flow of new service agreements at the Paris Air Show.

The 2019 Paris Air Show has brought more joy to engine manufacturers than airframe OEMs, which have booked few firm orders during the trade show.

CFM and Pratt & Whitey, in contrast, have announced significant engine selections from big aircraft orders placed months or even years previously, with IndiGo’s switch to the CFM LEAP-1A for 280 A320neos perhaps the marquee signing. 

Pratt & Whitney might argue that the Indian airline is merely spreading risk across its huge orderbook, but there was no such move from AirAsia, which stuck with the LEAP for a further 100 A321neos, a decision that will eventually take its LEAP fleet to more than 800 engines. 

Equally instructive are the signing of maintenance contracts set to shape the narrowbody engine aftermarket for the next decade.

By and large, low-cost carriers appear happy to sign OEM deals, with IndiGO agreeing to a long-term service contract spanning spare engines and overhaul support with CFM, and AirAsia extending its rate-per-flight-hour (RPFH) contract with the manufacturer to cover its latest order.

Chinese carriers Colorful Guizhou Airlines and Zhejiang Loong Air also committed to long-term RPFH deals with CFM, while Pratt & Whitney agreed long-term service agreements with most of its engine order customers at Paris, with Chile’s JetSMART, Middle East Airlines and an undisclosed airline all singing up for the EngineWise product.

Such deals might appear to offer little scope to profit from new technology for non-OEM engine maintenance providers, but they do not cover leased aircraft orders.

Half of CFM’s deals at the air show were with lessors and none chose service agreements, primarily because maintenance is the responsibility of the lessee.

However, even in this regard, the OEMs are making inroads, with GE Aviation signing up Nordic Aviation Capital to its TrueChoice Flight Hour package to support the lessors CF34-10E engines.

“This uniquely structured agreement provides NAC with the flexibility to lease aircraft to multiple operators while ensuring its CF34-10E engines’ maintenance needs are fully covered,” said David Kircher, general manager of regional engines and services at GE Aviation.

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