Aircraft engine manufacturers are under pressure to get bigger, more sophisticated new jet engines with new designs and materials off the ground.
In March, American jet manufacturer Boeing announced the initial test flight of the new GE9X engine – the world’s largest-ever aircraft engine, built by GE Aviation for Boeing’s 777X wide-body airliner. This marked the start of the engine’s flight test campaign, and while program manager Ted Ingling said it was “picture perfect”, the flight was preceded by months of delays due to technical issues with the engine.
Rival Pratt & Whitney, part of American conglomerate UTC, has had its own difficulties producing new engines for the Airbus A320neo (“neo” meaning “new engine option”), a re-engine development of the European company’s A320 narrow-body airliners. Most recently, a fault with knife-edge seals led American and EU safety regulators to limit the engines’ use. In India, where 40% of all A320neos fly, regulators grounded all aircraft equipped with the defective engines.
Rounding out the world's top three jet engine manufacturers, Rolls Royce is having engine trouble as well. Chief Executive Warren East admitted in March that the British company will have to replace faulty turbine blades in engines on 787s at a cost of £580 million ($800 million) over the next two years. Airlines, including ANA of Japan and British Airways, have had to cancel flights due to the defect.
Among the typical setbacks of manufacturing aircraft, delays in engine development are not unusual, though they have become less common in recent decades. Now they are piling up. As The Economist explains, a new generation of engines is “stretching designs and materials to their limit.” The lightweight titanium fan blades at Rolls’s new engine factory in Singapore, for example, are baked into shape in ovens. “Some 150 measurements are then taken to ensure that the curves are accurate to the width of a human hair. Be off by more than that and you risk a catastrophic failure.”
Despite delays, airlines are keen to acquire the new generation of jet engines, and orders keep rolling in. The trouble is, manufacturing aircraft engines is not a volume business. Adam Pilarski, an economist at consulting firm Avitas, compares engines to razors: They are sold at a loss, and the money is recouped through service contracts and data analytics. These once commanded margins of up to 35%, but this is changing, as new designs and materials make it harder to estimate repair costs or predict component lifecycles. Even a minor miscalculation can come with a steep price tag.
On top of these challenges, big aerospace companies pose a business threat to engine manufacturers. Seeing opportunities to improve their own margins, they are looking to get a share of servicing and analytics contracts, and requiring engine makers to pay billions to help develop new planes in exchange for exclusive rights to supply the engines. The relationship is growing uneasy.
