A320neo deliveries

Reuters reports that August (as well as full year) deliveries for the A320neo are disrupted by slow deliveries of PW's PW1100G. The goal is to deliver about 200 A320neo this year, only 78 have been delivered by the end of August.
That deliveries with the PW1100G are slow and delayed is not particulary new. Not mentioned in the article though is the fact that alos deliveries with CFM's LEAP-1A slowed down in the last two months. After delivering 10 A320neo with the LEAP-1A in June, there were 6 in July and 7 in August. For the PW1100G the numbers are 1 for June,  3 in July and 3 in August.
An indication for future delivieries is are the numbers of first flights with the respective engines:
In June 12 A320neo with the LEAP-1A made their first flights, then 5 in July and only 3 in August.
For the PW1100G the numbers are 0 in June, 4 in July and 8 in August.
So it looks like the situation at PW gets (at least) a little bit better, but worse for CFM.

Engine choices for NMA

It looks increasingly likely that next Boeing will launch the NMA -  or MoM, or 797, or whatever you want to call it.

One of the most interesting questions is the engine choice(s) that Boeing will make:

First of all, will the customer have an engine choice? Here the questions are:

-   does Boeing want to give the customers a choice

     and

- how large the engine OEM think the market for the new aircraft will be

CFM A321neo noise levels revised

Yesterday the EASA published new noise levels for the A321neo, which now include the "right" noise levels for the A321-251N and A321-253N, fitted with the CFM LEAP-1A engines. As for the A320neo, the A321neo with the LEAP-1A is a little bit better (read_less noisy) than the PW1100G. This is surprising, as P&W always claimed that the GTF concept has, beside better fuel burn, it's merits in extreme low noise because of the slower spinning fan and the better damping of the low pressure turbine noise due to better atmospheric dampening.
I would be interested to hear how P&W and CFM explain the difference...

The CFM LEAP LPC issue

For the first time CFM acknowledged, though not directly but through Boeing's B737MAX chief engineer Michael Teal, that the CFM LEAP-1B has an issue with the stall margin of the LPC. This was widely known in the industry for months now and in online forums like airliners.net were some hints to that issue. It is alos clear, that not only the LEAP-1B

After Airbus Press Conference: Rate Increase and LEAP-1A delay?

Airbus today announced their final 2014 orders and delivery results. Beside a new delivery record there is one noticable item that begs two questions: the increasing backlog of the A320ceo shouts and screams for a (very) near term announcement of a rate increase, which was probably decided some months ago. Also, it puts into question if the CFM LEAP-1A, the second engine for the A320neo, will be available on time. The PW1100G seems to be "out of the woods", getting certification late last year and Airbus CEO Bregier during the Investors Days in December said that he expects the first delivery of the A320neo in November 2015.
The backlog for the A320ceo stands now at 1508. This is 38 more than at the end of November, which I analyzed here. Subtracting all 102 "suspicious" orders gets us to 1406 open orders. The still not booked order from CASGC would lead us then to 1476 open orders for about 1164 delivery positions until 2018. So Airbus overbooked the A320ceo lines by 250 aircraft at current production rates.
Now, as I said above, I think a rate increase is coming for sure. For one to clear the A320ceo backlog as soon as possible, but also to be able to offer earlier production slots in upcoming campaigns.
As for the overbooking of the A320ceo, there could also be another reason: the LEAP-1A has still not flown on the GE Flying Testbed. At the time the LEAP-1C began the test campaign on the other GE testbed in early October CFM said that the -1A would follow within a month. Now we are two months later...maybe something was found during the -1C test campaign that needed a change for both variants?

B757 replacement - NSA or NST?

Two different concepts for a B757 successor emerged over the last few weeks.
First, there was an article by "The Motley Fool" (not exactly an aviation expert website) speculating about a B757MAX (and  Scott Hamilton from Leeham Co. confirming these rumours), with composite wings and a new engine. Although this rumour was quickly dismissed by Steve Wilhelm from the Puget Sound Business Journal and another "Fool" and Boeing itself assured that they are not planning any B757MAX, it would be a relatively straigthforward and easy way to fight against the A321neo, as the numbers and the market already showed that the B737MAX-9 will be an inferior aircraft (I expect some announcements in the not too distant future that will further show that Boeing has a problem here). A new wing, new wingbox and new engines (which would be a few percentage points better in SFC than the PW1100G and the LEAP-1A) would provide enough improvement to be a very good aircraft for thin transatlantic routes. But then what? Airbus would not stand by and could develop a A322 with a similar fuselage length, also a new wing and wingbox and the same engines. And with successors for both of the narrowbody families planned for 2030+ that will likely start at today's B737-800 size, an EIS around 2022 would provide a production run of 10 years at best. So that concept does not really make sense.
Meanwhile also Scott Hamilton wrote another article about the subject, making clear that the "757 replacement" can only be part of a new family of aircraft, starting at the B737-800NG/B737MAX-8 size and topping at about 240 passengers, set by the aspirations from Airbus regarding the A321neo and that an EIS would be not anytime soon, i.e. not 2022.

The other concept emerged from an article by Aspire Aviation and this is completely different. Daniel Tsang proposes a small twin aisle family with a 2-3-2 seating configuration, comprising of two models between 200 and 240 seats. This of course would be a clean sheet design with the associated high development costs. The B737MAX family would still sell, he thinks, for shorter routes, as the "NSA" (New Small Airplane, not the other one...) would be optimised for routes around 4000nm in a 200-220 seat 2-class layout (where a B737MAX-9 and a A321neo would have to trade range versus payload).

But would the market be large enough for such an aircraft to justify a completely new aircraft, built from (today) very expensive carbon fibres? I think: yes and no! No, as I think the seat count of 200-240 would not cover a market potential large enough. And yes, if this NSA (albeit then not so "small") would occupy a larger part of the market, ranging from the B757-200 all the way up to the B767-300, say, from 220-280 passengers and a range around 4,500nm, to cover transatlantic flights between the US East Coast and Europe. This aircraft would have the potential to replace all the B757-200W,  B767-300ER, A330-200/300 and maybe also some B787-8 that are used on these routes today (and more then).

Now: could this aircraft be the first Boeing to be powered by a geared engine?
A few weeks ago Rolls Royce very openly committed themselves to the geared technology and pursues such an engine for 2025. As I do not believe we would see the "NSA" (I would call it "NST", for "New Small Twin") before 2025, that could fit in Boeing's time planning.
Now with two of the big engine companies in the "geared camp" what will GE do? My bet: the next generation of narrowbody engines (beyond the A320neo/B737MAX generation) will be "geared only" - including GE! Of course nobody from GE (or Safran) will say so openly today, because that would mean to admit concede against the "gear". But I am sure that behind the scenes GE is working closely with their new affiliate Avio Aero in Italy (providing  the Fan Drive Gear System for the PW1100G) to have a an engine architecture ready for the mid 2020's. And Snecma is working on a geared open rotor in the Clean Sky project.

„Premature“ engine upgrades

In the context of my last post I wondered why MTU now starts talking about an upgraded GTF to be delivered in 2019. We are one and a half years away from EIS of the PW1100G on the A320neo and the engine is  - well – not selling bad. Why announcing an upgrade now? To enhance SFC by 3% does not sound cheap - GE and RR needed two improvement packages to bring the engines for the B787 to SFC spevc level.
Furthermore MTU COO Rainer Martens told the press that these enhancements could also be implemented into the other PW1000G family members (PW1200G/PW1700G for MRJ/E175E2 and PW1500G/PW1900G for CSeries/E190E2&E195E2). So we can be sure that all aircraft OEM’s will sooner or later ask for the upgrades, just a couple of years after EIS of their respective aircraft – remember that the E175E2 should have an EIS in 2020, AFTER the PW1100G is available with the upgrade. Sounds like all the development engineers will have secure jobs at P&W, MTU, JAEC and the other PW1000G partners for the years to come. Good for them, bad for the "bean counters" in the companies and the financial breakeven of the engine programs.
For Airbus, the revelation has probably a good and a bad side. The good side is that the A320neo will enhance the competitive position against the B737MAX (and maybe later a CS500), but also the A319neo could be in a better position against the CS300. On the other side, remaining delivery positions for the A320neo in 2018 will be not that easy to fill without giving another discount for not getting the upgrade.

Embraer bridging between E1 and E2

Much hype there was during and after the Paris Air Show last year, when Embraer launched their EJet E2 family. 365 orders, MoU and LoI from Skywest, ILFC and five unannounced customers sounded like a good start and some media was quick to compare it to the current backlog of the CSeries, which had a similar amount of orders at this time – but 5 years the “launch” LoI from Lufthansa/Swiss.

Now, a few months later, there are “just” two the two orders that were announced at PAS13: 100 aircraft for Skywest (E175E2) with 100 further options and both 25 E190E2 and E195E2 for ILFC also with an equal number of options. None of the five unannounced customers came forward since June 2013 and no other customer was added.

Last week Embraer announced their numbers for orders and deliveries in 2013. Deliveries for the EJets were exactly at plan with 88 for the year. Orders looked great with American, United, Skywest ordering large numbers of E175 and taking even more options.

But let’s have a deeper look in the orderbook: Open Orders at the beginning of the year was at 279:

    1 E170

188 E175

  73 E190

  17 E195

The E170 is obviously one delivery away from dead. It is too small for the North American regional market, where the new sweet spot if 76 seats in two classes and this is where the E175 fits in ideally. The backlog of 73 for the E190 does not look too bad at first glance, but in fact you have to subtract the 24 E190 for Jetblue as they are deferred until after 2020, when the E2 version of the E190 is available and Jetblue made it already clear that they are aiming for a switch to the E2. It could also be that they will abandon the 100 seater altogether by that time and finally cancel the order.

The 7 E190 in the orderbook from flynas (or Nasair) are also questionable, as the airlines is phasing out their EJets they already have. Another shaky part of the order book are the 24 open orders for E175 from flybe. The carrier is deep in a restructuring phase and has to become profitable soon. But let’s keep them in for that following exercise:

Without the 24 E190 for Jetblue the backlog at Jan. 1^st, 2014 was 255 aircraft. With a constant delivery rate of 88 aircraft per year the backlog will be at zero in Q4 2017 2016. But the EIS for the E190E2 is slated for the middle of 2018, the E195E2 should come in 2019 and the E175E2 finally in 2020. So Embraer has

-          to find more customers for the current EJets

or

-          to speed up the development of the E2 family

Well, in essence, they have to do both, I would say!

Embraer first announced the EJet E2 with in January 2013 when they said that they will be powered by PW1700G and PW1900G engines by P&W. These engines are essentially the engines for the Mitsubishi MRJ (PW1200G) and the Bombardier CSeries (PW1500G). These engines are already existing, tested and, in the case of the PW15000G, certificated. This is the big difference between the EJet E2 reengine program and the A320neo and B737MAX program, where the engines are the pacing item.

The EJet E2 aircraft are getting new wings, new undercarriages, a new flight deck and a full fly-by-wire system: sure, these things take their time, but Embraer took a lot of time already to decide how to react to the MRJ, CSeries and the A320neo/B737MAX. So there should have been more than just a concept at the beginning of last year and Embraer is currently testing a full fly-by-wire system with their Legacy 500 Business Jet. In fact, they “learned” so much that they switched to Moog as a supplier for the FBW system for the E2 Jets, as the Parker system contributed a lot to the delay of the Legacy 500/450 program (there could also be another reason behind that switch, as Parker is part of the “GE World” and GE lost the engine contract…).

In short, I think Embraer has to bring forward the E2 program as much as they can – otherwise they would face a production hole – but wait: there is hope: if the Mitsubishi MRJ would be delayed even further, the two big customers (Trans States and Skywest) for the MRJ would be forced to look at alternatives. The only logical aircraft that could replace the MRJ90 deliveries in the 2016/2017 time frame with the same cabin comfort would be the E175E1. This might be the reason why Skywest took options for 100 E175E1 last year when placing the order for 40 E175E1. Also United, American Airlines and Republic took further options for the E175E1. It looks like there is a considerable “hedging” against a further MRJ delay and this might help Embraer to bridge to gap between the current E1 and the forthcoming E2.

Discussion about the B757 replacement

Scott  Hamilton from Leeham has a post about the possible replacement of the B757.
 King5 then came out with it's own story, citing Scott.

I have to say I do not believe we will see a clean-sheet aircraft as a replacement for the B757 - at least not in the time frame Scott is mentioning. He sees a window for EIS opening in 2025, with Boeing probably being the first mover.
The reasons:

1. Business Case for B737MAX and A320neo. The A320neo will delivered from October 2015 onwards, the B737MAX roughly two years later (July 2017 as it looks right now). If a B757 replacement would be available in 2025, announced to the public by 2020, the B737MAX-9 would be dead by then. The B757 replacement aircraft (B757R) would be more economical on all missions - not just on the longer ones. In other words: if the -MAX9 would be more economical on shorter missions, there would be no justification for launching the B757R. In

Emirates asking for A380 engine enhancements

Emirates obviously wants some enhancements for their A380 engines - at least for the aircraft that should one day replace the first ninety. The last of these aircraft will be delivered in 2017 and by that time Airbus will have delivered around 240 A380 if all production slots are filled until that time. Well, obviously some of the ordered aircraft will be either delivered later as their deliveries are deferred (like for Virgin Atlantic) of won't be delivered at all (read: Kingfisher and probably Hong Kong Airlines as well as Air Austral).
Two engine manufactures share the A380 market: Rolls Royce and the Engine Alliance (50:50 JV between GE and P&W). Let's say both have around 50% of the market (actually, thanks to the large Emirates orderbook EA has a slight lead), then both manufacturers will have delivered 480 engines plus spares.
Now Emirates asks for a "propulsion technology crossover into the A380, in terms of what they’re doing on the 777X, the A320neo and the 737MAX”, says Emirates president Clark and claims that one of the EA partners will produce "wonders in propulsion technology" by 2020, when the A380 still should have GP7200 engines (and the Trent 900 of course as well). So he asks what the plans from GE and P&W are to improve propulsion efficiency of the GP7200.
my first question would be who of the two EA partners will produce these "wonders"?

• Does he refer to the GE9X? He should have a good knowledge about what GE is planning for this engine, although some questions arose around his comment that the engine would need water injection to be able to lift the B777X from Dubai year-round: read the first reaction from GE here, another one here. Clearly, the GE9X will be the state-of-the-art engine in it's class, encompassing the Trent XWB-97, as overall pressure ratio and bypass ratio will be higher and the use of CMC should save some cooling air, further elevating the core efficiency compared to the latest Trent engine.
• Or does he refer to the Geared Turbo Fan from P&W. From all what we know this engine defines the segment of the regional and  narrowbody engines for the years to come (closely followed by the LEAP engine family, of course).

Nevertheless which engine concept Clark has in mind, I wonder if the two partners in the EA are ready for a big improvement programme for the GP7200. Small improvements have already been made: today's GP7200 are better by 2% than original spec values. To improve the engine by any big (SFC percentage) number should be at least very costly, if not impossible without a change in architecture. But with only about 500 engines of the GP7200 sold by then there would be no hope for the engine program to ever produce a profit. So EA (as well as RR) will do whatever they can to avoid another large development investment in the engine. RR could on the other hand also offer a downrated Trent XWB, although this engine might be too heavy for the wing as it is today.
Last week , there was speculation in a german newspaper about what might be the A380 going forward plan from Airbus. Günter Butschek, Airbus COO speculated about "modifications" for the aircraft, Heinrich Großbongardt, a german aviation consultant, speculated about an A380neo. I guess in Hartford, Cincinnati and Derby this was not a fun-to-read...

Paris Air Show 2013 Recap

The Paris Air Show 2013 is history – and it wrote (at least a little bit) of aviation history:

Embraer

On the opening day it was Embraer to launch it’s highly anticipated EJet E2 family. Not surprisingly, the E195-E2 will be a stretch of the current E195. Also no surprise that the E170 will not be continued and that the E190-E2 will stay where it is, sizewise. The E175-E2 will be a little bit larger in capacity, stretching it’s fuselage by 0.62m or 24.4inches. The effect is that two more seats can be fitted and in a 1-class 31” layout there are now 88 seats compared to 86 seats in the current E175. This is exactly the figure that Mitsubishi gives for the MRJ90 – any questions? With the same engine as the MRJ will get, the same cabin capacity and a new wing (even larger now than the MRJ wing) the fuel efficiency of the two aircraft should be very close to each other. The MTOW of the E175-E2 is a little bit higher (44.33 t vs. 42.8t), but the Embraer has more range, too (1920nm vs. 1780nm).

A320neo engine orders at Paris Air Show

The ever-entertaining story about market share on the A320neo family goes into another round at the Paris Air Show. Two years ago CFM hit back hard at P&W during the Air Show. P&W had won the first round of orders back then with ILFC first committing to the PW1100G for 60 of their 100 aircraft strong A320neo order. Also Indigo choose the Geared Turbo Fan as well as Lufthansa.

Then CFM came back after redesigning the LEAP-1A with another (7th) stage of low pressure turbine and a slightly larger fan (78" instead of 75") to gain SFC. CFM then won SAS, Republic, Air Asia, GECAS (no surprise here), the remaining 40 aircraft from ILFC and Virgin America and was in a comfortable lead. During the last two years each of the two manufacturers won a deal here and there and the CFM consortium is still ahead with about 53% of the engine orders. So let's take a look at the A320neo orders which do not have an (announced) engine decision yet and how the picture could change after the Paris Air Show.

Narrowbody Review 2012

Slowly, but inevitably, the year 2012 is coming to an end. Here are some thoughts about the current situation of the narrowbody market:

Orders

 

Boeing now has not yet fulfilled its own prophecy and has “only” 969 firm orders for the B737MAX in its books (with 819 orders in 2012), shy only 31 from the goal to have 1,000 by the end of 2012 and I guess that there will be another order (or more) in December to fill that gap..

GE buying Avio?

There are reports that GE might buy Avio from private equity firm Cinven.
Avio is a supplier for the GEnx engines and for also CFM.
But what is maybe more important is that Avio is also a supplier for the PW1100G Fan Drive Gear System.
Avio has a long history in designing and building gear systems - the ADP (Advanced Ducted Prop, build from a PW2000 core), tested by P&W back in the early 90's, used a (then Fiat) Avio reduction gearbox.
So what is behind GE's move to acquire Avio? There are three possible motivations:
1. GE just wants to grow (and participate in some revenue from the PW1100G program)..
2. GE wants Avio to keep away from P&W in the future.
3. GE wants to get the intellectual property of the PW1000G Fan Drive Gear System to have a option to move to a gear architecture in the future - possibly for the next generation of narrowbodies, expected now for the late 20's/early 30's.

Surprising engine choice

Last week Aviation Week came out with a story that Philippine Airlines opted for the V2500 and PW1100G for their ordered A321ceo/neo fleet and chose the Trent700 for their new A330-300 fleet.
As of today the whole PAL fleet is powered by either CFM or GE engines this would be a surprise if true - but also shows that PW gained market power through the buy of the RR share in the IAE consortium.
Looking at the A321 in particular though, the choice of the V2500 is not that surprising. From here I pulled all A320 deliveries from this year through August 31: about 84% of all delivered A321 have the V2500. In contrast, about 60% of the A319 and A320 were delivered with the CFM56. As the A320 counts for roughly 76.5% of all A320 family deliveries and the A319 for 7.5%, the CFM56 has the lead with 53.2% market share over the V2500. This is slightly down from 2011, when the CFM56 had a share of 56% for the whole year. In 2009 I found that the market share of the CFM56 was 61%. So with the shift to larger narrowbodies, like I described earlier, the market share in the narrowbody engine segment also changes.

Farnborough Airshow Orders

Here I will try to track all orders and commitments coming in at the Farnborough Airshow (main manufacturers only - sorry).


AIRCRAFT

LEAP leaps ahead...

After Qantas announced that that they choose the LEAP-1A for their 78 A320neo, the CFM engine has a clear lead in the neo engine race. The first A320neo to be delivered will be operated by lowcost subsidiary jetstar. This is a blow to P&W and it's allies, as jetstar is a current IAE V2500 customer. But obviously GE's and CFM's leverage was better - GE supplies the GEnx for Qantas B787 and CFM of course has it's stakes at Qantas on the current 64 aircraft strong B737 fleet. Also the A330 fleet is equipped with the CF6-80.
This deal shows again that despite of current rumours about the LEAP engine being up to 4% behind the GTF in fuel burn (and I personally doubt that the number is actually that high), there are always other considerations driving business decisions at airlines. Fuel burn might have become more important in these days, but there is more to consider for an airline...

Airbus A320Neo Engine Race

It is just another "intermediate result" in a race that could last for 20 years or maybe more (and we are just at the beginning): but now that the PW1100G-JM scored another two sales (TransAsia for six aicraft plus six options and GoAir for 72 aircraft), the Geared Turbo Fan is in the lead over the LEAP-1A again. The LEAP engine scored big during the Paris Air Show, taking the lead by a wide margin then after announcing a design change with a seventh LPT stage and a larger fan diameter. With these changes CFM claimed to be as good if not better than the GTF in fuel burn. That claim was dismissed by John Leahy last week when he said that the GTF would be about 1.5% better in fuel burn.
The GTF has now announced orders for 488 aircraft, the LEAP-1A has announced orders for 465 aircraft.

UPADTE:  CFM just annouced that ALAFCO choose the LEAP-1A for the 35 additional A320neo orders. So LEAP-1A is in the lead again:
LEAP-1A:         500
PW1100G-JM: 488

Technology Credibility

During the SWA web press conference about their B737MAX order, the CFM EVP Chaker Chahrour made an interesting statement. Leeham News and Comments has the quote here: "We believe we have much more credible technology than GTF."
Well, apart from that this might have been only some PR talking, I think we should shed some light on the credibility of the quote itself.

Changing the engine landscape

That was really a big surprise for everyone, I guess! Not so much the fact, that PW bought  RR out of the IAE – that was considered by UTC for about two years. The real surprise is the Joint Venture to tackle the market of next generation single aisle aircraft – in particular, of course, the Airbus A30X and the Boeing NSA/B797.

At first glance, this is a technical win for Pratt & Whitney, as, at least in the near term, development will focus on the Geared Turbo Fan technology. The Open Rotor concept, advanced geared technology and “other advanced configurations” will also be pursued, but it seems that the GTF has won for now.

RR rationale 

But what is the reason for Rolls Royce to “give up” their own plans (at least for the nearer future) for next generation engines in that market? So far Rolls Royce planned with three options: Advance2, a two spool advanced turbo fan, Advance3, a three spool configuration and the open Rotor option as the answer for beyond 2025. Work on these concepts will continue, RR President  Mark King says, but to what extent is unclear. King also says that the formation of the joint venture should not be seen as a shift in strategy, but as a natural extension of their strategy and an elegant solution. Well, this is at least a discussable point of view…

The JV does not include the PW1217G and the PW1524G for the Mitsubishi MRJ and the Bombardier CSeries. An interesting question would be if Rolls Royce will compete with an own engine for the reengining of the EJets or the clean-sheet narrowbody CSeries competitor. P&W logically would offer versions of the PW1200 and PW1500 (maybe with added technology, depending on the EIS). Rolls Royce could become a risk sharing partner in these engines, but this seems unlikely.

A little bit in contrary to what RR officially said, they were also in the running to power the A320neo, but lost to CFM and P&W. Inside the IAE there were no agreement about the architecture of an offer for the A320neo, so both major IAE partners took their offer to Airbus. As RR had difficulties to scale the three spool concept down to the size of the neo thrust requirement (the most inner spool had such a small diameter that it could not withstand the torque).

The consequence was that Rolls Royce would have been out of the new narrowbody business once the last A320 with V2500 engines were delivered. Of course the aftermarket business for the V2500 would have been a long cash-in program for Rolls Royce, but without at least a participation in a running program it would have been very difficult to get back into the business once an A30X or a Boeing NSA where on the table. The fate of Pratt & Whitney after they lost their B737 business with the JT8D is a good example what Rolls Royce is about to avoid with the new JV and their “modest financial investment” in the PW1100G-JM.

PW rationale

So there is a good reason for RR to start the JV with P&W. But what about P&W? What is their rationale? Maybe it’s like that:

With a unbeatable customer base, CFM seems to be a set candidate for the Airbus A30X as well as the Boeing NSA. It is unlikely that one of the aircraft OEM’s will offer three engine options, so one of either P&W and RR would have lost. Maybe each of them would have gotten one application – but with both joining forces, this CFM antagonist can be seen as an almost sure second choice for both aircraft, without competing against each other and spending a lot of money to win against the other. So it is a win-win situation for both OEM. Not so much necessarily for the existing partners in the PW1100G-JM, JAEC and MTU. Their shares in the next generation engine program could be lower than it is in the PW1100G-JM now. On the other hand  they now have the possibility to enlarge their share in the V2500 and at least MTU already submitted a statement that they intend to do so.

IAE exit

Why does Rolls Royce exit the IAE consortium?

First, this is good news for P&W and the PW1100G-JM. Marketing the GTF engine becomes easier, as the owner of IAE and the partners in the PW110G-JM are the same now. Campaigns were airlines take both the classic version and the neo version of the A320 (like American Airlines and LAN) are now easier to handle. Also existing V2500 customers who order the A320neo can be given cross concessions easier (look what CFM/GECAS did for Frontier to get the A320neo business).

For Rolls Royce it means they get $1.5bn in cash immediately and a steady stream of cash flow in the next 15 years without any cash out (winning new campaigns usually means a cash out) and saving own IAE personnel, as they are “just” a supplier now).

Now - does Rolls Royce need cash? If one looks at the balance sheets of the last years: not immediately. But with the Trent1000 three years behind (cash-in) schedule, at least two of the A350 models delayed, further development costs for the A350-1000 TrentXWB engine, there could be a cash problem approaching Rolls Royce in the next couple of years, so the deal with P&W to exit the IAE could ease that.