Global Commercial Aero Turbofan Engine Market, Supply Chain and Opportunities: 2011 - 2017
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Creating the Equation for Growth Global Commercial Aero Turbofan Engine Market, Supply Chain and Opportunities: 2011 - 2017 Lucintel Brief Published: July 2012 Lucintel 1320 Greenway Dr., Suite 870, Irving, TX 75038, USA. Tel: +1-972-636-5056, E-mail: [email protected] Copyright © Lucintel Table of Contents • Executive Summary • Market Analysis of Commercial Turbofan Engine Industry • Supply Chain Analysis of Commercial Turbofan Engine Industry • Technology Trend and Future of Commercial Turbofan Engine Industry • Growth Opportunities and Emerging Trends • About Lucintel Creating the Equation for Growth 2 Executive Summary • Commercial aero turbofan engine on new airframe deliveries totaled 1,862 units in 2011. Turbofan engine deliveries realized 1% CAGR during the 2006-2011 time frame. Engine market was US $16.7 billion in 2006 and reached $21.2 billion with CAGR of 5% during 2006-2011. • CFM International is the leading turbofan engine manufacturer in the narrow body aircraft market, capturing 62% market share of the active fleet. GE dominates in wide body aircraft with 48% share. • Major drivers of this industry include growth in air traffic, environmental regulation, the need for economization to enhance airline profitability/competitiveness, and the replacement of aging fleet. • Commercial aero turbofan engine on new airframe deliveries in terms of units is expected to growth with CAGR of 5% during the 2012-2017 time frame. • Some of the emerging trends in aero engine market include : (1) use of second -generation biofuels , (2) lower maintenance cost, and (3) design & development of fuel-efficient and light weight aero engines • Titanium, nickel, and steels are the dominating materials in aero engine design – with an increasing interest in composites. • Aero engines to be qualified and released during the forecast period include the CFM LeapX and the PW1000G Geared Turbofan. The manufacturers of these engine cite the following advantages: (1) Enhanced fuel efficiency over current market offering, (2) Reduced emission of NOx and CO 2 (3) Lighter weight • China Commercial aircraft COMAC C919 will be launch with CFM LeapX engine but in future China has plan to manufacture engines for the airframe domestically. Creating the Equation for Growth 3 Table of Contents • Executive Summary • Market Analysis of Commercial Turbofan Engine Industry • Supply Chain Analysis of Commercial Turbofan Engine Industry • Technology Trend and Future of Commercial Turbofan Engine Industry • Growth Opportunities and Emerging Trends • About Lucintel Creating the Equation for Growth 4 Global Commercial Aero Turbofan Engine Market Overview • An aircraft engine is the primary component of the propulsion system for an aircraft that generates mechanical and in-flight electrical power. • This market is dominated three major manufacturers: GE Aviation (a subsidiary of General Electric, based in Evendale, Ohio, US); Pratt & Whitney, (a subsidiary of United Tech-nologies Corporation, based in Hartford, Connecticut, US); and Rolls-Royce (Derby, UK). • The industry is also characterized by consortiums: International Aero Engine (Pratt & Whitney, Rolls-Royce, and MTU); CFM International (GE and Snecma); and Engine Alliance (GE and Pratt & Whitney). • Revenue-sharing partnerships play an important role in how the industry operates. Several suppliers are involved in this type of relationship with engine OEMs, including Volvo Aero, IHI, KHI, MHI, and Avio SPA. • The Trent 1000 and GEnx are the newest engines in the fleet, soon to be followed by the CFM Leap-X and PW1000G Geared Turbofan. Creating the Equation for Growth 5 Commercial Turbofan Engine OEMs on Wide Body Aircraft (Engines with Thrust Range of 60-90 K Lbs.) International Engine CFM Pratt & General Aero Engines Alliance Aircraft Rolls-Royce (JV: Snecma Whitney Electric (JV: PW, (JV: GE & & GE) RR,MTU) PW) A310 A330 A340 A350 A380 B767 B777 B787 B747 Creating the Equation for Growth 6 Commercial Turbofan Engine OEMs on Narrow Body Aircraft (Engines with Thrust Range of 20-40 K Lbs.) International Engine CFM Pratt & General Aero Engines Alliance Aircraft Rolls-Royce (JV: Snecma Whitney Electric (JV: PW, RR, (JV: GE & & GE) MTU) PW) A318 A319/320/321 A 320 Neo B737 B757 B737 Neo Comac C919 Creating the Equation for Growth 7 Portfolio of Commercial Turbofan Engines for Wide & Narrow Body Aircraft CFM 56-5 Leap X CFM 56-7 CFM 56-3 CF6 80C2 CF6 80E1 GE 90 115E1 GenX CF6 50E2 CF6 80 A GP 7270 PW 6000 PW 4156A PW 4000 PW 4090 Engine Manufacturers Engine Engine Manufacturers Engine PW JT8D PW JT9D PW JT9D V2500 RR Trent RR RB211 RR 895 RR BR715 500/1000 RR Trent RR Trent RB211-524 970B XWB 020 40 60 80 100 120 Thrust Range ( in 1,000 lbs) GE Engines RR Engines PW Engines JV: GE & PW CFM Engines JV: PW, MTU & Japanese Aero engine Creating the Equation for Growth 8 Geographical Footprint: Commercial Turbofan Engine Manufacturers GEAE primary manufacturing sites Rolls-Royce: Business expansion are located in the US. in South America, the Middle East, Pratt & Whitney: and Asia through securing orders • Aircraft engine manufacturing for development of an enhanced activities are primarily located in the Trent XWB engine (with 97,000 lbs US. of thrust, for the enhanced Airbus • It serve more than 500 customers A350-1000). that operate large commercial engines in 136 countries. General Electric Pratt & Whitney Rolls-Royce Rolls -Royce: The Company opened new plants in GE: Pratt & Whitney engines are Crosspointe, Virginia, • JV of GE Aviation and Aviation Industry Corporation of manufactured in partnership with US, where discs for China to develop the new generation of commercial companies in countries including civil jet engines are integrated avionics systems with an immediate priority on Germany, Japan, China, and made. supporting development of China’s first narrow-body South Korea. P&W has a passenger jet (COMAC 919). partnership with Singapore Airlines • Increase its presence in China, with nearly 2,000 GE and in engine overhaul and CFM56 engines now in service. An additional 1,000 GE components repair facilities. Note and CFM engines are on order. • CFM International is a joint venture between GE Aviation, a division of US-based General Electric and Snecma, a division of Safran of France, with manufacturing of engines in their respective facilities. • IAE International Aero Engines AG is a joint venture between Pratt & Whitney of the United States and MTU Aero Engines of Germany, with manufacturing of engines in their respective facilities. • Engine Alliance, a 50/50 joint venture between General Electric and Pratt & Whitney, with manufacturing facilities mentioned above. Creating the Equation for Growth 9 Global Commercial Turbofan Engine Market Trend and Forecast: 2006-2017 Global Commercial Turbofan Engine Trend and Forecast Key Insights in Units: 2006-2017 +5% 2,455 2,500 +1% • Global commercial aero engine shipments 1,862 totaled 1,744 units in 2006 and grew at a CAGR 2,000 1,744 1,500 of 1%, reaching 1,862 in 2011 1,000 – CFM International and IAE are the major players driving the market. 500 Engine Deliveries (Units) Deliveries Engine • The industry realized revenues of $16.7 billion 0 2006 2011 2017 in 2006, growing to $21.2 billion by 2011, at a Global Commercial Turbofan Engine Trend and Forecast CAGR of 5% in US $ Billion: 2006-2017 – Engines for narrow body aircraft made up +6% 29.9 30 81% of the market on a volume basis, and 25 +5% led industry growth with a CAGR of 20%. 21.2 • Commercial aero engine market is expected to 20 16.7 15 reach $29.9 billion by 2017 with a CAGR of 6% 10 from 2012-2017 5 – CFM and PW are expected to be the Revenue (US $ Billion) (US$ Revenue 0 dominant engine manufacturers for next- 2006 2011 2017 generation narrow body aircraft. Creating the Equation for Growth 10 Global Commercial Turbofan Engine Market by Manufacturer: 2006-2017 Global Commercial Turbofan Engine Market Share 2011 1,862 Units Delivered Key Insights • Highly consolidated industry, with top 3 major 5% CFM 6% EA players controlling 85% of the total market 14% GE • The market is dominated by CFM, accounting IAE for 62% of the market in 2011, followed by IAE. 9% 62% PW 4% RR • CFM International, a 50-50 joint venture between Snecma and GE, manufactures the Global Commercial Turbofan Engine Market Share 2017 CFM56, one of the most fuel-efficient aero- 2,455 Units Delivered engines in the market. 5% CFM − New CFM engines reduce NO X emission by 15% EA 25%, and are powering several aircraft, GE 9% PW including A319, A320, A321. and B737. 3% RR − With its new Geared Turbo Fan engine, PW 68% share is expected to grow at the expense of IAE and, to a smaller extent, CFM. Creating the Equation for Growth 11 CFM dominates narrow body turbofan engine fleet with 62% market share GE dominates wide body turbofan engine fleet with 48% market share in 2011 Aircraft Type PW GE RR CFM IAE EA Narrow Body Wide Body Range 76%-100% 51%-75% 26%-50% 6%-25% 0%-5% World Aircraft Active Fleet Market Share by Engine Manufacturer 2011 Narrow Body Active Fleet Wide Body Active Fleet Total Fleet in 2011:11,576 Total Fleet in 2011: 4,317 EA CFM IAE RR 5.2% 15.5% 20.1% 0.2% RR PW 6.0% 26.6% 16.5% PW 62.0% CFM 47.9% GE Creating the Equation for Growth 12 Top 6 Airlines: Turbofan Engine Inventory by Age and Manufacturer Delta Airlines Active Engine American Airlines Active Engine Southwest Airlines Active Engine Active Inventory by Manufacturer Active Inventory Manufacturer Active Inventory Inventory Inventory Inventory Manufacturer