Engine consortium eyes Chinese narrowbody programme to build on A320 momentum

International Aero Engines is counting on the Chinese market to power further growth and to cushion the impact of the current economic downturn.

While IAE is trimming production this year of its V2500 engine, the consortium, which last year celebrated its 25th anniversary and this year will deliver its 4,000th engine, says it continues to secure new orders.

"We're seeing slowed growth, but we're still seeing growth," says IAE president and chief executive Jon Beatty. "We're still seeing growth in China. And we're still doing some new business in Europe."

He adds: "We're doing real well in China," despite the stiff losses and traffic declines reported by most Chinese carriers over the past year.

He explains that while the downturn has prompted Chinese carriers to defer delivery of new widebodies, there have not yet been any cancellations or deferrals of Airbus A320s, which are powered by the V2500 and the rival CFM International CFM56.


While V2500s power roughly 50% of the A320s worldwide, Beatty says in recent years IAE has been selected for 73% of the A320s ordered by Chinese carriers. He points out IAE was the first supplier to have employees on site at the new A320 assembly plant in Tianjin and V2500s will power nine of the first 10 A320s it will deliver.

IAE shipped the first V2500 to Tianjin in March. The first Chinese-assembled A320 flew for the first time last week and is scheduled to be delivered in June to Sichuan Airlines.

Sichuan is one of several Chinese carriers to have placed large new orders for V2500s over the past two years. Sichuan, China Eastern Airlines, China Southern Airlines, Hainan Airlines, Shanghai Airlines and Shenzhen Airlines combined now have outstanding orders for more than 120 V2500-powered A320s, according to Flight's ACAS database.

With a majority of the A320s assembled in China due to be powered by V2500s, Airbus Tianjin could easily account for 10% of IAE's total output. Initially, Airbus plans to assembly two aircraft a month in Tianjin, but production is expected to reach four A320s a month by 2011.

Beatty says IAE plans to produce 330-340 V2500s this year, down slightly from the 360 produced last year to reflect Airbus's decision to cut A320 production from 36 to 34 aircraft a month.

"We will do between 330 and 340 in 2009 and something similar in 2010," Beatty says. "I haven't finalised my 2010 plan yet because I think there's some probability Airbus may have a further rationalisation of production. But I don't think it will be dramatic."

Half of the V2500s are produced at Pratt & Whitney in Connecticut and the other half at Rolls-Royce in Germany. P&W and R-R each have 32.5% stakes in IAE while Japanese Aero Engines (JAEC) owns 23% and Germany's MTU Aero Engines the remaining 12%.

IAE is also hoping its recent success in China will give it a leg up in the competition to select an engine for the country's new large commercial aircraft project. The Commercial Aircraft Corporation of China (Comac) last year unveiled plans to develop a new 130- to 200-seat aircraft aimed at replacing A320s and Boeing 737s from 2016 and has requested information from several engine manufacturers, including IAE. "We are working with Comac," Beatty confirms.

The new Chinese project has its sceptics, but IAE is not one of them. "The Chinese will build a very successful aircraft," Beatty says. "It may be off-schedule at the beginning, but eventually they will build a nice product."


While Pratt & Whitney's new geared turbofan engine has been selected by Bombardier for the new 110/130-seat CSeries and by Mitsubishi Aircraft for the new 70- to 90-seat MRJ, Beatty says for larger single-aisle aircraft a consortium approach is more likely: "I just came back from a board meeting in London and Rolls, Pratt, MTU and JAEC have all stated emphatically that IAE is the preferred route to market.

"The IAE franchise is wildly successful. The brand name is irreplaceable. Finally, now we're getting almost as well known as CFM."

Source: Flight International