Airlines find the grass isn’t always greener with new engines
Technicians work on an engine at GE Aerospace’s engine shop in Lafayette, Indiana.
Leslie Josephs/CNBC
RIO DE JANEIRO — CEOs of major airlines say aircraft engine manufacturers have failed to keep their promises to airlines; It’s a problem that has plagued an industry that has been struggling for years with aircraft shortages and a recent doubling in fuel prices.
It’s a paradox: Engine manufacturers have dazzled carriers with more fuel-efficient options for new planes. Boeing’s and Airbus. But production shortages and disappointing reliability in those engines are becoming costly problems, CEOs said in interviews here at the industry’s largest annual meeting.
Airline executives said they had to dismantle the engines and take them to crowded shops for maintenance earlier than expected, increasing costs and eating into the fuel savings they were supposed to get from the engines.
Airline leaders told CNBC this week that demand for travel remains strong despite higher prices, so keeping planes grounded means money remains on the table, just as this year’s $100 billion higher fuel bill has dampened the airline’s profit prospects.
The new engines, which promise fuel savings of about 15% or more compared to previous models, are “an engineering marvel,” Canadian WestJet CEO Alexis von Hoensbroech told CNBC in an interview ahead of the annual meeting of the International Air Transport Association, which includes more than 370 airlines.
“However, when you push the limits it sometimes comes at the expense of reliability and what we are all seeing is that these engines are having to undergo unscheduled maintenance much more frequently than previous engine generations,” he said.
New model aircraft engines burn hotter, allowing them to use less fuel. This is crucial as fuel is airlines’ biggest cost after labor. But this can also mean they wear out faster, causing planes to crash, although carriers have spare engines.
Von Hoensbroech and other airline executives told CNBC that the new engines did not achieve the reliability airlines needed because of the improvements.
“It’s a big challenge because it adds so much cost,” he said. “So a lot of the fuel savings are actually consumed by unplanned maintenance costs.”
‘Lack of engine’
While manufacturers have invested heavily to expand engine overhaul and other maintenance capabilities, third-party shops have also reaped a windfall.
New engines are expensive, but aircraft production is still behind schedule, causing old engine values to remain high.
For example, a CFM56 engine made by GE Aviation According to IBA Group and its French partner Safran, which powers older Boeing 737s, it would cost $9.2 million at the start of the year; This was an increase of 17% since 2019. Pratt & Whitney PW1127 for Airbus’ newer narrow-body aircraft is up more than 57% during that period, according to the aviation intelligence and consulting firm.
Engine overhaul and maintenance has become a more than $58 billion business.
IATA’s outgoing director general, Willie Walsh, told the conference in Rio de Janeiro that he was “deeply disappointed that customers have not made a dent in manufacturers’ finances” and pointed to an increase in profits for engine suppliers.
“My message to the engine [original equipment manufacturers] “It’s simple: Stop stalling us and get back to making great engines that run and last,” he said. “Allowing these failures to extend into the next decade is simply unacceptable for customers.”
GE Aerospace, which for its part produces both Airbus narrow-body A320 aircraft and engines for Airbus Boeing’s He said that he was working on improvements in narrow-body and wide-body aircraft and also increased production.
“We have made significant investments to increase uptime on the wing, reduce cost of ownership and increase output, and we will continue to invest to deliver meaningful improvements,” the company said in a statement. “While there is more to be done, we are making progress every day to continue delivering long-term value to our customers.”
GE powers Boeing’s best-selling 737 Max through its CFM joint venture with France’s Safran. These Leap engines are also among the options in Pratt & Whitney and Airbus A320 narrow-body aircraft. GE engines are also used in the majority of the 787 Dreamliner.
United Airlines CEO Scott Kirby praised GE for making improvements but said there are still concerns about the industry.
“The biggest constraint for at least the next five years will be the engine shortage,” Kirby said.
A Rolls Royce jet engine is displayed at the Rolls-Royce aircraft jet engine manufacturing and repair facility in Blankenfelde near Berlin, Germany, on February 28, 2023.
Omer Messinger | Getty Images News | Getty Images
He noted the shortage of parts such as forgings and castings, and when it came to restoring supply, he said: “I don’t think we’ve started yet.”
Pratt and some of its customers are experiencing another manufacturing defect issue from several years ago. The problem forced airlines to ground planes with these engines; This was one of the biggest challenges faced by Spirit Airlines, which is now defunct. Pratt’s parents RTXHe did not immediately comment.
Another manufacturer, Rolls-Royce, said it was still working on efficiency. The company said it was investing £1 billion ($1.33 billion) in its Trent engine fleet, a mode that “offers up to three times the time on the wing, enabling improved fleet planning and reducing the maintenance burden for customers.”
