Engineers work on engines at GE Aerospace’s engine shop in Lafayette, Indiana.
Leslie Josephs/CNBC
RIO DE JANEIRO — Aircraft engine makers are failing to meet promises to airlines, CEOs of major airlines say, a problem plaguing an industry that has struggled for years with aircraft shortages and more recently with a doubling of fuel prices.
That’s a paradox. Engine manufacturers surprised airlines by offering more fuel-efficient options for new U.S. aircraft. boeing And Airbus. But the lack of production and unreliability of these engines is becoming a costly problem, CEOs said in interviews at the industry’s largest annual gathering here.
Airline executives said they were forced to remove engines earlier than expected and take them to crowded stores for maintenance, driving up costs and sucking away fuel savings that could have been gained from the engines.
Airline leaders told CNBC this week that travel demand remains strong despite the fare hikes, and keeping planes on the ground means cash remains in hand, just as a $100 billion increase in fuel costs this year is hurting airline profit prospects.
Alexis von Hohensbroek, CEO of Canada’s WestJet, said in an interview with CNBC ahead of the International Air Transport Association’s annual meeting, which is attended by more than 370 airlines, that the new engine is a “marvel of engineering” that promises fuel savings of about 15 per cent more than the previous model.
“But pushing the limits can sometimes come at the cost of reliability, and what we are all seeing is that these engines have to undergo unscheduled maintenance much more frequently than previous generation engines,” he said.
Newer model aircraft engines burn hotter and use less fuel. This is important because fuel is the biggest cost for airlines after personnel. But that could also mean that even though the carrier has some spare engines, the engines wear out faster and the plane could crash.
Von Hohensbroek and other airline executives told CNBC that while the new engines are an improvement, they don’t have the reliability airlines need.
“This is a big challenge because it costs a lot of money,” he says. “So much of the fuel savings actually goes into unplanned maintenance costs.”
“Not enough engines”
Manufacturers are investing heavily in expanding engine overhaul and other maintenance capabilities, and third-party shops are also reaping the windfall.
New engines are expensive, but aircraft production remains behind schedule, which also drives up the value of older engines.
For example, the CFM56 engine ge aerospace Prices at Safran, the French partner that powers older Boeing 737s, were $9.2 million at the start of the year, up 17% since 2019, IBA Group said. The Pratt & Whitney PW1127, Airbus’ new narrowbody jet, has risen more than 57% over the period, according to the aviation intelligence and advisory firm.
Engine overhaul and maintenance is a more than $58 billion business.
“We are very disappointed that our customers have not taken a hit to the manufacturers’ finances,” outgoing IATA director general Willie Walsh said at a conference in Rio de Janeiro, pointing to soaring profits for engine suppliers.
“My message to engines (original equipment manufacturers) is simple: stop gouging us and get back to building great engines that work and last,” he said. “Expanding these failures into the next decade is completely unacceptable to our customers.”
GE Aerospace has Airbus’ narrow-body aircraft, the A320, boeing He said he is working on improving the narrow-body and wide-body aircraft, and increasing their power output.
“We have made significant investments to improve flight times, reduce cost of ownership and increase production, and we will continue to invest to drive meaningful improvements,” the company said in a statement. “There is still work to do, but we are making progress every day to continue delivering long-term value to our customers.”
GE is backing Boeing’s best-selling 737 Max plane through a CFM joint venture with France’s Safran. These leap engines are also an option on the Airbus A320 narrowbody aircraft, and another is from Pratt & Whitney. GE engines are also used in the majority of the 787 Dreamliners.
united airlines Chief Executive Officer Scott Kirby praised GE’s improvements but said there were still concerns in the industry.
“The biggest constraint for at least the next five years will be the engine shortage,” Kirby said.
A Rolls-Royce jet engine on display at the Rolls-Royce aircraft jet engine manufacturing and repair facility in Blankenförde, near Berlin, Germany, on February 28, 2023.
Omer Messenger | Getty Images News | Getty Images
He pointed to the shortage of parts such as forged and cast products, and said, “I don’t think we’ve started to level out supply yet.”
Pratt and some of its customers have the added problem of manufacturing defects from several years ago. The problem forced airlines to ground planes equipped with these engines and was one of the biggest challenges facing the now-defunct Spirit Airlines. Pratt’s parents RTXdid not immediately comment.
Another manufacturer, Rolls-Royce, said it was still working on efficiency. The company said it has invested £1 billion ($1.33 billion) in its Torrent engine fleet and “a mode that provides up to three times more time on the wing”, resulting in improved fleet planning and reduced maintenance burdens for customers.
