Engine manufacturer Pratt & Whitney solved a big problem by buying out Rolls Royce from the International Aero Engine consortium for $1.5 Billion.   Pratt gets to take control of its destiny for engines made for single aisle airliners and Rolls Royce gets to make money from manufacturing them. 

What changed?  For a pittance (even at $1.5 Billion), Pratt & Whitney no longer has Rolls Royce blocking the IAE consortium from adopting Pratt’s Geared Turbo Fan.   But Rolls Royce continues to make money from the consortium by manufacturing the current IAE V2500 engines.  P&W bought Rolls off and it was a good deal at twice the price.

This gives Pratt control of pricing for both the V2500 engine as well as its Geared Turbo Fan engines in the Airbus lineup.  It can present a financial business case as advantageous as CFM’s with the Leap and Leap56 engines.

It makes sense for Rolls who has never been a big player in engines for single aisle airliners in that it keeps their hand in the mix but lets them move on and focus on their lineup for twin aisle aircraft.  It’s notable that P&W hasn’t had a real good core strength in that market for 10+ years now.  Each gets to focus their efforts where they are successful and, more importantly, each gets to compete against GE who has good strength in the CFM lineup as well as in the GEnX and GE90 engines.

Filed under: Airline Fleets by ajax