April 22, 2020 | International, Aerospace
Guy Norris
As the airframers go, so goes the aircraft engine industry.
After spending most of the past decade accelerating production to keep pace with unprecedented airliner delivery rates the engine makers have spent the past month in reverse thrust.
But as production lines slow, and in some cases come to a full stop, the grim guessing game about the industry's post-COVID-19 pandemic future can begin. For every engine company, anchored midway between their own supply chains and Airbus, Boeing and Embraer in particular, all scenarios paint a bleak picture and the potential impact of the virus-triggered crisis is alarming on at least three key levels.
Near term, all must weather the storm and rapidly shrink capacity by 40% or even more to match the new realities of the slower airframe production rates now expected for the next couple of years. Second, having long since focused the core of their business models on the aftermarket, they must adjust to significantly lower revenues from a near term reduction in demand for maintenance, repair and overhaul (MRO) services.
Third, with nearly all their resources dedicated to survival, reduced revenues and spending trimmed, development of new engines and propulsion technology is expected to slow significantly—at least in the near term. However, all the manufacturers know that in the mid-to-longer term the environmental pressures on performance will return and so will the relentless demand for lower emissions and greater innovation. Already committed programs will therefore continue, albeit potentially stretched over longer test and development schedules.
From a volume perspective, GE Aviation and Safran's CFM joint venture is expected to see the greatest change. Having delivered 1,736 LEAP-1s and 391 CFM56-5/7s in 2019, output from the combined French and U.S. operations will decline significantly in 2020 in lockstep with urgent reductions in production at Airbus and Boeing. CFM, which was previously on track towards a planned annual production rate of more than 2,000 LEAP-1s by the end of 2020, cannot comment on numbers while its parent companies remain in a dark period prior to earnings calls at the end of April, but is expected to slash this target by around half.
GE Aviation, which was already expecting a leaner 2020 before the COVID-19 pandemic because of delays to the GE9X-powered Boeing 777-9 and slow-downs to the GE90-115/GEnx-1 powered 777-200LR/300ER and 787 programs, is eyeing the even more troubling impact of the crisis on its aftermarket business. Although around a quarter of GE Aviation's revenues come from its military and other businesses, just 30% comes from commercial engine sales. A much larger portion of its revenue—approximately 45%—comes from MRO services.
While some programs, like the CFM56 for the P-8 maritime patrol aircraft as well as military fighter engine efforts, will continue much as before, the company has already taken drastic action to stem losses by furloughing half of its engine manufacturing workers for four weeks. This move, taken in early April, followed an announcement in late March that it was reducing its workforce by 10% (around 2,500 employees), in direct response to the collapse of its MRO workload which the company estimates will be down by around 50% through mid-year at least.
However, given the exodus of around two-thirds of the world's airline fleets into storage (almost 17,000 aircraft), the short to medium outlook for engine MRO would be described as dire at best. Compounding the issue for many of the OEMs is that the higher value aftermarket engines powering the widebody fleet, particularly the older generation Airbus and Boeing models, now look increasingly unlikely to ever return to service—at least in their existing guise.
For Rolls-Royce, this problem is particularly acute as the UK engine maker focused increasingly on the widebody market over the past decade, widening its exposure to reliance on the support revenue from aftermarket work on older fleets of 747 and 777s as well as older A330s. With full-time premature retirement a possibility, including the previously unthinkable sunsetting of relatively young Trent 900-powered A380s as well as the rapid decline of the RB211-535 powered 757 and Trent 500-powered A340-600 fleets, the company can no longer bank on the expected rebound in deferred maintenance coming out of the crisis.
Rolls has also rushed to mitigate losses by enacting measures aimed at saving at least £750 million ($937 million) in cash this year. These include a 10% salary cut for the global workforce and canceling dividend payments. Further moves are expected as the company adjusts to rate reductions announced by Airbus involving the Trent-powered A330no and A350-900/1000, as well as yet-to-be announced rate cuts for the Trent 1000-powered 787 which will shortly be revealed in detail by Boeing.
Pratt & Whitney, now part of Raytheon Technologies, is similarly impacted across the board with production of the PW1000G geared turbofan reduced for the A220/A320neo families and commercial revenues hit by falling aftermarket revenues for the PW2000/PW4000 and V2500. Measures such as 10% pay cuts through year-end, as well as furloughs, are being introduced while research and development spending is being frozen. Deliveries of military engines, in particular the F135 for the F-35 fighter and PW4000 for the KC-45A tanker remain unaffected. The early retirements of the PW4000, as well as some CF6-powered fleets, is also significantly impacting revenues for German engine maker MTU.
https://aviationweek.com/air-transport/aircraft-propulsion/daily-memo-powering-down
July 22, 2024 | International, C4ISR, Security
Play ransomware's new Linux variant targets VMWare ESXi, expanding its reach. US leads in victims, with manufacturing and services most affected.
October 30, 2023 | International, Aerospace
The United States and South Korea began major air exercises on Monday, involving 130 warplanes from both countries to simulate 24-hour wartime operations.
July 23, 2018 | International, C4ISR
By: Mark Pomerleau The Army's top intelligence official signed the service's new signals intelligence strategy July 16, a move that defense leaders believe leaves the Army better situated to better fight despite electronic warfare and cyber attacks. The new strategy ensures "our readiness to provide timely and relevant SIGINT-support [and meet] the commander's information needs in a large scale combat operation against a sophisticated adversary,” Lt. Gen. Scott Berrier, said July 18 during an event on Capitol Hill hosted by the Association of Old Crows. Officials say the integration of SIGINT, electronic warfare and cyber is critical from a material, organization and doctrinal perspective. “Not only will our four lines of effort improve our SIGINT corps' capabilities and relevance in the face of rapid changes in the global security environment, it will also enable our electronic warfare and cyberspace effort to meet new challenges,” Berrier said. The four initiatives in the new strategy include: - Organizing and building the Army SIGINT force, - Educating the force, - Equipping the force, and - Developing doctrine. The new strategy increases the Army's ability to collect intelligence against peer adversaries, such as China and Russia, and provides a firm foundation for successful electronic warfare and cyber operations, Berrier said. A key component of the convergence includes the new Terrestrial Layer System (TLS), a SIGINT/EW system projected to be fielded on vehicles and used by new military intelligence-electronic warfare (MI-EW) companies the Army is working to stand up. The Army wants SIGINT, electronic warfare and cyber systems on the same platforms in the air and ground domain, Maj. Gen. Robert Walters, commander of the Intelligence Center of Excellence, said at the event. These systems, Berrier said, should be able to not only sense the environment but employ some type of action such as electronic attack or cyber capability. Why converge? Officials have stressed repeatedly in the last year the need for colleagues in similar disciplines throughout the Army to stay in touch and reap the mutually beneficial equities on behalf of commanders in the field. Lt. Gen. Stephen Fogarty, the head of Army Cyber Command, said commanders shouldn't have to have something explained to them by the EW guy, the SIGINT guy and then the cyber guy. “What we decided is there's a better way, we have to pull it all together” for the commander, he said at the event. “We're going to have to work together because we all operate in the same space. And so do we really need three separate tools to plan operations in the spectrum? My argument would be no.” From an organizational perspective, the 29 series electronic warfare personnel will have deep knowledge in both cyber and electromagnetic spectrum operations. On the materiel side, especially with programs like the Terrestrial Layer System, the cyber and intel community are meeting regularly to integrate their requirements, officials said. In addition, Maj. Gen. John Morrison, commander of the Cyber Center of Excellence, told reporters in June that the Intelligence Center of Excellence is working with the Cyber Center to help ensure integrated formation and integrated capabilities. https://www.c4isrnet.com/intel-geoint/2018/07/19/the-army-wants-to-build-a-better-signals-intelligence-force/