Aero Engine Parts:

Repair or Replace?
Evaluating the current fleet

David Hygate
SVP Business Development
March 24th 2010 Hamburg
Identifying the critical success factors
l Assessing the current engine orders and deferral trends
l What is the active fleet in terms of populations of different
engine types?
l Forecasting the impact of the changing average engine age on
the maintenance requirement
l Understanding the effect the changing average engine age will
have on parts availability
 World’s airlines operate over 45,000
western engines today

Current fleet

On order/option

In storage or temporarily inactive

Retired or destroyed

Engines x 10,000
Source data: OAG, Feb 2010
 Program delays and recession have
pushed back wave of engine deliveries
Potential introduction of
upgraded single-aisle
variants could cause switc
hing
Options of backlog to newer type
s

Source data: OAG, Feb 2010

 Order backlog dominated by CFMI
and GE
PJ PW
EA
IAE
RR
GE

CFMI

Source data: OAG, Feb 2010

 Engines of growth:

Engine order backlog – February 2010

Source data: OAG, Feb 2010

 Both the old and the new present
opportunities
Growth engines promise
big market for the future
+ Early adopter advantage
- New parts
- OEM strong
- Limited repairability
- Potential upgrade of SA a/c
-
Legacy engines offer
attractive option
+ Engines for parting out
+ Exchange programs
+ Used parts
+ Developed repairability
+ Dispersed customer base
 Maintenance requirement in early
years can be managed well by OEMs

Fleet-wide long-term maintenance contracts

Invest for long MTBR and lowest $/hour
New products
First users
New material
Few repairs

New Engine age Old

Later years favour bespoke micro-
management of individual engines

Invest for long MTBR and lowest $/hour

Long-term maintenance contracts
New products Older product
First users Used material

New material Extensive repairs

Few repairs Focus on lowest $/shop visit
Uncertain commitment to type
Short-term Time and Material contracts

New Engine age Old

 Typical engine life cycle – average of
several types
% of total delivered fleet still active

Inflexion point
20 years

Years from EIS of program

Source data: OAG, Feb 2010

 Another 3000 engines will become 20
years or older in the next five years

Source data: SAI, Feb 2010

 Engines on the edge of a nervous
breakdown





hese engines could also be impacted by A320/737

des
Source data: SAI, Feb 2010
 A320/737 re-engining could:
lReduce values of current aircraft and
engine models
lCause current orders to be transferred to
new types
 and in so doing …
lReduce attractiveness of MRO market for
“growth” engines
lStimulate T&M opportunities as more
engines are phased out earlier
 Picking the best engine segment

lAvailability of used material

lScope for in-house parts repair
lLow % of market served by OEM
lLarge customer base
Key success factors when managing
engines to a lowest $/SV budget

A
L
 Thank you,
any questions?
dhygate@aerospace-services.com
+44 (0) 759 839 6647

guaranteed to save you money