Pratt & Whitney Meets 2017 GTF Delivery Target

United Technologies subsidiary Pratt & Whitney delivered 374 PW1000G-family geared turbofan (GTF) engines last year, “right in the middle of our target range,” UTC CEO Greg Hayes told financial analysts during the company’s 2017 earnings call Wednesday.

In achieving 9 percent organic sales growth for the year, P&W led all of UTC’s major businesses in sales growth in 2017. P&W “had a huge quarter, a great 2017, and growth will accelerate this year,” said Hayes. "[GTF] production will almost double in 2018 and it will go up again in 2019.”

P&W posted a $1.46 billion operating profit for 2017 on revenues of $16.16 billion, and UTC forecasts that the engine-maker’s sales will grow “in the low teens” percentage-wise this year as the GTF production rate continues to climb.

Hayes said P&W has addressed reliability deficiencies in the GTF, having designed and certified permanent fixes for the number-three bearing oil seal and the inner and outer combustor lining in each PW1000G engine. Premature deterioration of those parts caused oil system chip-detector warnings in many GTF engines in 2017, requiring a number of airlines—particularly the initial two Indian operators of A320neos—to ground a sizable number of aircraft on an emergency basis until Pratt repaired or replaced the engines.

However, now “the number of AOGs is less than a handful, and we’ve got more [spare engines] than we need” to service any remaining AOGs, said Hayes. Having decided in the third quarter to divert into PW1100G and PW1500G spares pools a sizable—but still undisclosed—number of GTF engines originally intended for installation on new aircraft, P&W had on hand more than 40 spares at the end of the year. “We’ll make more this year, but not at the same ratio,” said Hayes.

“Every [GTF] engine out the door today has got the two big fixes in it. The challenge in 2018 is that we have to do a number of overhauls,” he added, referring to the need to install the redesigned parts involved in the two permanent fixes in on-wing engines. GTF engines now achieve an average dispatch reliability rate of 99.88 percent, and airline operators are praising the engines’ fuel-efficiency, he said.

Hayes pointed to the choice by Delta Air Lines of PW1100Gs to power the 100 A320neos it ordered last month as a reflection of operator satisfaction with and the reputation of the GTF. “They wouldn’t have selected it if they didn’t think it was the right engine,” he said in reference to Delta, which he called “a very sophisticated customer.”

Commercial-engine aftermarket sales—which climbed 11 percent in 2017—provided another big boost for P&W revenues last year. “The aftermarket in the V2500 is entering the sweet spot,” said UTC chief financial officer Akhil Johri, who expects P&W to see another 10 percent growth in V2500 shop visits this year and more than 1,000 large-engine shop visits overall in 2018. “It’s a long time since Pratt & Whitney has been there and it is only going to grow,” he added, as the V2500 production rate continues to remain high and PW1000G engines begin to contribute to the company’s MRO and other aftermarket activities. The V2500 is manufactured by the International Aero Engines partnership, which includes P&W, Japanese Aero Engine, and MTU Aero Engines.