NEWTOWN, Conn.: A rough recovery has begun following the economic meltdown of late 2008 and a dismal 2009. Through the malaise, Airbus and Boeing maintained their backlogs and have announced increased production rates for their best-selling narrowbodies. Meanwhile, the military engine market has remained robust, which bodes well for Pratt & Whitney.
Pratt & Whitney posted sales of $12.6 billion, down 3 percent from the $13 billion reported in 2008. Operating income for the year was $1.84 billion, down 13 percent from $2.12 billion in 2008. Pratt & Whitney’s financials are reported under its parent company, United Technologies Corporation.
Defense-related engine programs remain Pratt & Whitney’s strong suit. Overall, the military side of the business is expected to grow markedly, supported by the F119, as well as the much-improved F100. Most importantly, Pratt will benefit from its F135’s position as primary power for the F-35 Joint Strike Fighter. The company will not only be filling orders for the U.S. requirement but also to meet the needs of nations worldwide, as much of the F135’s production potential lies with international sales of the JSF. Competition will be fierce, though, as the F135 faces a significant challenge from the GE F136 for JSF orders, despite congressional attempts to kill this alternate engine.
Pratt & Whitney’s commercial operations are not as strongly positioned, with the company trailing its competitors in engine sales on widebody aircraft. Pratt & Whitney’s commercial engine offerings are currently limited to the F117 (PW2000) and PW4000 series engines. The USAF’s C-17 transport is the sole application for the PW2000, while the PW4000 appears on the 767, 777, and A330. Pratt’s involvement as a partner with IAE and the Engine Alliance has proved beneficial, as the A320 and A380 engine markets would be out of the company’s reach if not for a strategic partnership with another engine builder.
One of the company’s more promising commercial programs is the PW1000G, which completed its flight-test program in late 2009. The PW1000G, formerly referred to as the Geared Turbofan engine, is a new family of next-generation commercial and business jet engines that offer double-digit improvements in fuel burn, environmental emissions, engine noise, and operating costs. So far the engine has garnered three applications: Bombardier’s CSeries, Mitsubishi’s MRJ, and Irkut’s MS-21. According to Pratt, the new engine is expected to provide a 12 to 15 percent reduction in fuel consumption when installed on a current airframe, and a 20-25 percent reduction when installed on an optimized airframe such as the MRJ and CSeries. Further enhancing the engines prospects is interest from both Airbus and Boeing in possibly repowering their narrowbody aircraft in order to make them more fuel efficient.
Pratt & Whitney has also begun to sharpen its focus on the very profitable aftermarket services segment. With airline fleets holding on to aircraft longer, the need for more support becomes critical. Pratt & Whitney has been investing in partnerships and joint ventures around the world to serve this growing need.
Nonetheless, Pratt & Whitney has been hurt by the steep downturn in the airline industry and is responding by cutting costs. As a result, Pratt initiated the closure of its plant in Cheshire and some operations in East Hartford, Conn., as it seeks to control costs. The plant will be shuttered by 2011 and work moved to Columbus, Ga.; Singapore; and Japan.
However, the move was halted by a court injunction, with the injunction on the cuts lasting only through the duration of the current contract between the company and the union, which expires in December.