Pratt, UTAS Underscore Strong Aftermarket.jpg
PW4000, 100" 100 inch, On Wing, Sunset, Front

Pratt, UTAS Underscore Strong Aftermarket

PW4000 demand, spares sales support double-digit growth.

United Technologies Corp. (UTC), continuing to out-pace industry on commercial aftermarket growth, reported strong second-quarter (Q2) support revenues for both its Pratt & Whitney and UTC Aerospace Systems (UTAS), and is confident enough in the trend to raise its full-year revenue guidance.

Both Pratt and UTAS posted 12% year-over-year increases in aftermarket sales last quarter thanks to several positive developments, UTC executives said. UTAS benefitted from a 12% increase in repairs, while initial provisioning—lifted by intra-company sales of spare Pratt PW1000G geared turbofans—jumped 20%. The spare engines accounted for 15% of the provisioning growth.

The large commercial engine aftermarket business continues to benefit from strong International Aero Engines V2500 demand, while the PW4000 continues to surprise. While total PW4000 inductions are down, the largest variants, the 112-in motors that power Boeing 777-200s, 200ERs, and -300s, continue to flow in and drive material demand.

"We're seeing operators recapitalize some of those engines, and it speaks to the demand for a lift out there in the marketplace," says VP-Investor Relations Carroll Lane.

The solid Q2 aftermarket figures came on the heels of even better Q1 figures, with Pratt and UTAS posting an 18% and 16% improvement, respectively. The first-half performance was impressive enough for UTC to cite the commercial aftermarket trend as the primary factor in raising the bottom end of its full-year revenue guidance by half a billion dollars, to $63.5 billion.

It also supports an emerging broader narrative that suggests the aftermarket is far out-pacing both its recent historical growth rate of about 3.5%, and even global traffic's 6-7% pace. Part of the reason: airlines catching up on maintaining older aircraft that, absent strong demand, would likely be parked, and strong demand pushing utilization rates higher than projected.

"Look, this trend line won't continue at [Q2's]" 12%," UTC President Greg Hayes says. "But right now, there has been a consumption of spares out there [that[] airlines have to order. You can't continue to take things off the shelf [and not replace them]. And so we're benefiting a little bit from this."

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