2011Supported by:                www.ubmaviationnews.com
Y O U R E N G I N E I S O U R P R I O R I T Y.As the only U.S.-based independent CF6-50 heavy maintenance, test, and overh...
Engine MRO outlook    Engine MRO represents the biggest part of MRO spend and the engine fleet is expected to grow    at 2...
Table 1    Engine OEM                  Fleet Size            Fleet Size                 CAGR (%)               Fleet Share...
worth $42.7bn, a decrease from the 2007                                                     Table 2peak year of spend of a...
suppliers. OEMs have the ability to sell long-                                                                            ...
Since 1995, OEMs have increased theirshare of the market by 30 percentage points,         Engine MRO market in recessionpr...
economic growth and fuel prices. The current             Despite this, PMA remains a strategic tool                       ...
Has the wool been pulled over your eyes?With savings up to $100,000 per shop visit,who can afford a “No HEICO PMA” contrac...
An aero engine’s life cycle can be divided into three main stages: the financial, management and  trading phases. Careful ...
During the initial ‘honeymoon’ period of an engine’s life cycle, its maintenance is largely determined by the OEM’s produc...
deterioration can be expected in terms of both                                                                            ...
The use of PMA parts and DER repairs instead of the standard OEM material and processes is one of the central questions wh...
Spare engine financing  Just as the aviation industry was showing signs of economic recovery the ash cloud descended  and ...
ENGINE LEASING                    POOLING                        TRADING Conserve your capital              The means to k...
Lessors like to receive maintenance reserves as the airline burns value off the engine asset                              ...
underlying interest rates; low base rates willnot last forever, however, and without a struc-tural overhaul of the financi...
lessor simultaneously find his re-marketing          region, with growth in China continuing but at                       ...
? If not than                    ied                rtif                 d                                    o           ...
The evolution of low-emissionscombustion chambers incommercial aircraft engines,1990 — 2010  During the 1990s the aerospac...
the airport’s activities and initiating charges foraircraft movements dependent on the aircraftengine’s certified NOx emis...
The author at the delivery of the first SAS 737-600 equipped with CFM56-7B20 DAC engines, September 1998. The green flower...
The CFM56-5B entered service with relatively few problems.how they tried the GE engineers just could not      were replace...
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  1. 1. 2011Supported by: www.ubmaviationnews.com
  2. 2. Y O U R E N G I N E I S O U R P R I O R I T Y.As the only U.S.-based independent CF6-50 heavy maintenance, test, and overhaul center, the team at Kelly AviationCenter stands ready to make your engine our priority, delivering expertise and facilities unparalleled in the industry.Kelly Aviation Center features vast state-of-the-art MRO and test facilities that enable a quick response, customizedto your specific needs. From quote through delivery, Kelly Aviation Center will deliver your engine quickly, reliablyand affordably – every time.
  3. 3. Engine MRO outlook Engine MRO represents the biggest part of MRO spend and the engine fleet is expected to grow at 2.5 per cent a year over the next decade. David Stewart of industry consultancy AeroStrategy looks at the facts and figures. I n 2009, there were approximately 20,500 sion but also in the coming years when the next active air transport aircraft with 45,000 jet aerospace cycle moves into an upswing. The engines. This fleet flew about 114 million reduced spend and the timing of this recovery engine flying hours, and generated $15.3bn in is, of course, one of the aforementioned short- engine overhaul spend. term challenges! By these measures and many others, the air transport engine market is thus one of great Engine fleet significance. Engine OEMs and MROs are AeroStrategy and UBM Aviation together together responsible for the performance of an produce an independent forecast of the aircraft asset which is a prerequisite to airline reliabil- and engine fleet, and associated MRO spend, ity and aircraft availability and a driver of fuel over the period 2009-2019. Based on this fore- costs. It also represents the largest share of cast, the engine fleet is expected to grow at MRO spend (see below). 2.5 per cent per annum, from 45,000 to This article provides the numbers behind 57,500 over the next decade. this engine market. It also highlights some of This fleet can be segmented in a number of the key trends and challenges for the engine different ways that can inform supplier strate- MRO supply chain, not only today in the reces- gies and focus in the coming years. For exam-2 The Engine Yearbook 2011
  4. 4. Table 1 Engine OEM Fleet Size Fleet Size CAGR (%) Fleet Share Fleet Share 2009 2019 2009 (%) 2019 (%)CFMI 15,200 23,000 4% 34% 40%GE 9,800 13,100 3% 22% 23%P&W 8,570 4,730 -6% 19% 8%Rolls-Royce 6,460 8,110 2% 14% 14%IAE 3,590 7,050 7% 8% 12%Other 1,150 1,420 -4% 2% 1% ple, the regional analysis of the fleets in 2009 already developed corporate, capacity, cus- and 2019 (see Graph below) highlights some tomer support and logistics strategies for the obvious yet dramatic conclusions. Everyone Asia region risk losing out in a significant way. knows that the growth rates in Asia (especially A second way of segmenting the fleet is by China and India) will be relatively high. But what engine OEM. Table 1 (above) provides the asso- does that mean in absolute terms? The active ciated information. jet engine fleet in Asia Pacific (including China This demonstrates (amongst other things) and India) will grow from 9,650 in 2009 to the huge growth in the narrowbody engine fleet 15,500 in 2019 — that’s an additional 5,850 (CFMI and IAE), the growing share of the fleet engines to support and maintain. At 4,040 represented by GE (including its share of CFMI engines, this is larger than the absolute engine engines), and the significant decline in the Pratt fleet growth in North America and Europe com- and Whitney fleet (excluding their share in IAE). bined. It is clear that engine MRO suppliers and This table does not address one clarion issue: others in the related supply chain who have not “What about the potential re-engining of the A320 and the 737?” This subject that might have greater clarity by the time this article is published and read. The data assumes that re-engining does NOT occur, and by so doing, shows how mas- sively significant for some OEMs this re-engining Engine fleet growth by region 2009-2010 decision is. For example, if the A320 family is re- (region, CAGR and absolute increase) engined with a Pratt & Whitney GTF (geared tur- bofan) and a CFMI alternative option (an outcome 70,000 that seems increasingly likely at this time), how different would the above table look for Pratt & Whitney and IAE? Very different is the answer. 60,000 A third important segmentation approach is by maturity of the engine. Using the following cat- egories: in production (e.g., CFM56-5B, CFM56- 50,000 7, CF6-80E, GE90); future (e.g., GENX, Trent XWB, SAM146); mature (e.g., CF6-80C2, 40,000 PW2000, RB211-535); and old (e.g., JT8D, CF6- 50, RB211-524). Graph 2 (p6) shows the emphatic switch in the engine fleet towards the 30,000 “in-production” and “future” categories. In 2009, these represented 50 per cent of the fleet, and in 2019 this share grows to 78 per 20,000 cent. The old fleet declines at 10 per cent per annum, the mature fleet at four per cent per annum. What’s the implication for the supply 10,000 chain? For those suppliers with a portfolio focused on mature and old engine types, it’s clear that the challenge of how to get capability 0 on and access to newer engine types is now 2009 2019 looming very large. Rest of World, +3.3% p.a. + 2,800 engines Europe, +1.5% p.a. + 1,940 engines MRO spend outlook Asia-Pacific, +4.8% p.a. + 5,850 engines North America, +1.3% p.a. + 2,100 engines The 45,000 engines and 20,500 air trans- port aircraft generated an MRO market in 20094 The Engine Yearbook 2011
  5. 5. worth $42.7bn, a decrease from the 2007 Table 2peak year of spend of about $45bn. Thisdecline was driven primarily by the permanentparking of aircraft resulting from the high fuel Region Engine MRO Engine MRO Absoluteprice and airline failures in 2008 and from therecessionary pressures of 2008 and 2009 that Market 2009 Market 2019 Growth ($B)resulted in declining fleet-wide aircraft utilisa- ($B) ($B)tion. North America 5.3 6.0 0.8 How does this MRO spend break down? The Europe 4.5 6.0 1.4largest segment is engine overhaul at $15.3bn(36 per cent), followed by component overhaul Asia-Pacific 3.4 6.9 3.5($9.4bn, 22 per cent), line maintenance 0.8 1.7 0.9 Middle East($8.7bn, 20 per cent), airframe heavy mainte-nance ($6.3bn, 15 per cent) and modifications Rest of World 1.4 2.0 0.6($3bn, seven per cent). That is, engine over- TOTAL 15.3 22.5 7.2haul, defined as off-wing engine maintenanceactivity only (i.e., excluding engine manage- sation is expected to increase as airlines seekment and on-wing activity) is the biggest driver to improve asset utilisation and reduce unitof airline MRO spend. cost. The associated forecast shows annual What are the expectations for growth? engine utilisation growing from 114 millionWhilst the total MRO market will grow to $58bn hours to 174 million (4.3 per cent per annum).in 2019 at 3.2 per cent per annum (in constant Once again, the engine-related MRO spend2009 $ terms), engine overhaul is forecast to information can be usefully segmented to illus-grow at above this rate, at four per cent per trate or re-emphasise the challenges for theannum, to $22.5bn in 2019. This growth rate engine MRO supply chain.is higher than that for the engine fleet (2.5 per The MRO spend regional analysis (Tablecent per annum) because average aircraft utili- 2) reinforces and exacerbates the previous The Engine Yearbook 2011 5
  6. 6. suppliers. OEMs have the ability to sell long- term MRO support deals at the point of air- Share of engine fleet by engine maturity, 2009 and 2019 craft purchase and they control access to technical data, documentation and many 100% parts. They can also be more flexible on mate- rial pricing within their MRO offers, should they choose to do so. As evidence of the mar- 80% ket strength of OEMs, one just has to observe the market penetration of the Rolls-Royce TotalCare offer on their own engine models, especially the Trent family. 60% So the 2019 information from this segmen- tation analysis (by engine maturity) raises an important challenge for airlines - they need to 40% develop strategies that enhance competition and/or help protect/reduce costs, especially on the larger, newer engines where OEMs tend to have a stronger market position. The ability 20% of the engine OEMs to raise/escalate their prices even in the midst of the current reces- sion remains an open and regular complaint of Future 0% many airlines. Old One segmentation approach obviously not Mature yet discussed is by engine type. In 2009, there were five engine families that generated more In Production than $1bn in demand (in descending order of market size): CF6-80C2, V2500, CFM56-3, PW4000 (all versions), and CFM56-7. In 2019, there are seven engine families with MRO observation on the importance of Asia in demand greater than $1bn (in descending the future. order of market size): V2500, CFM56-7, Asia Pacific accounts for almost 50 per cent CFM56-5B, GE90, PW4000, CF6-80C2 and the of the absolute growth in engine MRO spend CF34.Table 3 and the region will be a larger engine MRO mar- It is staggering to note that the largest three ket than North America and Europe in 2019. engine markets, those that power the A320 This is driven not just by the fleet growth, but and 737NG, will alone generate a combined Measure 1995 2009 also by the age demographics of the fleet 2019 market size of over $9bn! This is a huge already in operation. potential market, and this once again highlightsMarket A different segmentation is by aircraft cate- the dramatic impact that a re-engining decisionSize ($B) 6.5 15.3 gory: regional jet engine (e.g. CF34, AE3007), of the A320 and 737NG (with a discussedIn-House single-aisle (e.g., CFM56-7, V2500) and twin- entry into service of about 2014/2015) willShare 54% 23% aisle (GE90, PW4000, Trent family). Whilst twin- have on the future breakdown of the market.OEM aisle engines account for 27 per cent of theShare 13% 43% fleet, such engines generate some 45 per cent Engine MRO supplyIndependent of the engine MRO spend, simply because they There are four main categories of supplier inShare 14% 19% are larger and more expensive to maintain. engine MRO — the OEMs, in-house airlineAirline Third Regional jet engines represent 14 per cent and shops, airline third-party providers (e.g., DeltaParty Share 19% 15% six per cent of the fleet and spend respectively, Tech Ops, LH Technik, Iberia) and independentsOutsourced whilst for single-aisle, the numbers are 59 per (e.g., MTU, Standard Aero and ST Aerospace).Market ($B) 3.0 11.8 cent and 49 per cent. This is of particular In 2009, engine OEMs held a 43 per cent importance to airlines because, unsurprisingly, share of supply. This includes OEM-based joint there is less supplier choice on the larger venture suppliers such as TAESL, SAESL and engines and therefore typically less competi- HAESL. Some 23 per cent of engine MRO is tion. conducted in-house, 19 per cent by independ- It was pointed out in the earlier fleet analy- ents and 16 per cent by airline third parties. sis that “in-production” and “future” engines Note that in this calculation, where, for exam- will account for 78 per cent of the fleet in ple, LH Technik overhauls engines for 2019. The same is roughly true for engine Lufthansa, this is considered in-house. MRO spend. And on newer engine models, it There has been a significant shift in this is also valid to say that engine OEMs have a supply breakdown over the last 15 years (see competitive advantage over other third-party Table 3).6 The Engine Yearbook 2011
  7. 7. Since 1995, OEMs have increased theirshare of the market by 30 percentage points, Engine MRO market in recessionprimarily by taking work from “in-house” supply, The recent recession has obviouslythe proportion of which has dropped by 31 per- impacted spend on engine MRO. Airlines havecentage points. Interestingly, the combined parked many of the old maintenance intensiveshare held by airline third parties and inde- aircraft such as the 737 Classic and they havependents remains virtually unchanged at 33-34 reduced overall aircraft utilisation to betterper cent. As a result of this change in purchas- match capacity with demand.ing behaviour by airlines, the “available” or out- Given the imperative to reduce costs, air-sourced market has grown at just over 10 per lines have sought many other ways to reduce In 2009, there werecent per annum over this period, to $11.8bn in their engine MRO spend as well. Examples approximately 20,500 active2009. include: a reduction in workscope for shop vis- This outsourcing trend will likely continue its; where possible, more repairs and less air transport aircraft withinto the future, albeit not at such a fast rate as replacement of expensive parts; deferment of 45,000 jet engines. This fleethistorically. The reasons for this are threefold. the replacement of the very expensive life-lim-First, as airlines move into new aircraft, the ited parts and use of short-stub engines; flew about 114 million engineassociated new engines are becoming increas- greater leverage of spare or surplus engines in flying hours, and generatedingly reliable and the cost to establish overhaul lieu of an overhaul; and of course, some air- $15.3bn in engine overhaulcapability is getting higher. These two factors lines have sought to renegotiate their MRO con-make the business case for in-house capability tracts. spend.more and more difficult to justify. Second, air- All these changes in behaviour have meantlines today are focusing more on their “core that engine overhaul suppliers, depending onbusiness” of flying passengers. And engine their engine and customer portfolio, have seenmaintenance to most airlines is non-core. revenues decline on average by 10-15 per cent.Third, a viable supply base exists for many When will recovery occur? This is ultimatelyengine types, so airlines can and should lever- driven by the financial health of the airlineage this opportunity. industry, which in turn is very dependent on The Engine Yearbook 2011 7
  8. 8. economic growth and fuel prices. The current Despite this, PMA remains a strategic tool outlook is for relatively slow global economic for airlines to use in the face of increasing (GDP) recovery in the order of two to three per prices or poor parts availability from OEMs. cent per annum, with fuel prices being quite Therefore, it is expected that adoption of PMA high at over $80/barrel. In this case, 2010 will will recover and increase, especially in the air- likely be a year of low single digit percentage frame components and interior parts of the air- growth, with recovery really taking hold in craft. 2011. A number of key challenges have already However, a worst case scenario would be been raised. In particular, there is the growing another drop in economic growth and continu- importance of the Asia Pacific market and the ing high fuel prices. In this event, the engine perceived threat (to costs) of more limited MRO market is likely to remain depressed for a sources of supply on the new larger engines while longer. In an upside scenario, where the coming into service in the next decade. In addi-It is staggering to note that the expected slow economic growth continues, and tion, the size and growth of the single-aisle the fuel prices drop below $80, the market engine MRO market (A320/737NG) will havelargest three engine markets, would probably see a quicker and more “V- been an expected foundation for many suppli-those that power the A320 and shaped” recovery. ers’ revenue prospects over the next decade. A737NG, will alone generate a decision to re-engine the A320 and the 737NG Trends, challenges and would change the long-term outlook for the cur-combined 2019 market size of opportunities in engine MRO rent engines significantly.over $9bn! This is a huge No engine MRO market review would be Opportunity obviously also exists. Marketpotential market, once again complete without a comment on the status and recovery is expected in the not too distant development of PMA. The recession has seen future and robust growth of four per cent perhighlighting the dramatic the use of PMA decline by some 17 per cent annum (in constant $) is forecast. This com-impact that a re-engining since the 2007 peak. There are a number of bined with an increase in outsourcing means reasons for this, including: airline use of buffer an even higher growth rate in the available mar-decision of the A320 and stock rather than buying of inventory; more ket will occur. However, this higher market737NG will have on the future repairs rather than replacement of parts; park- “availability” will only be realisable and acces-breakdown of the market. ing and cannibalisation of the mature aircraft sible to airline third-party and independent fleets where PMA had a higher penetration of MROs if they develop counter-strategies to the material content; reduced airline resources threat of OEM-based long-term MRO contracts available to the PMA approval process; and last signed at aircraft delivery. but not least, OEM defensive measures. This Engine MRO is a large, global, competitive, latter point can be illustrated by GE/CFMI’s technologically and service demanding market. agreements with potential adopters/users of The critical long-term threats and opportunities PMA, the independent suppliers such as are evident for all to see. The winners will be AVEOS and ST Aerospace. This has success- those who take action, develop the appropriate fully given GE/CFMI greater influence over the strategies and build the right capabilities, part- parts/material supply chain. nerships and portfolio to succeed. I8 The Engine Yearbook 2011
  9. 9. Has the wool been pulled over your eyes?With savings up to $100,000 per shop visit,who can afford a “No HEICO PMA” contract clause? Whether you are looking for savings on just one part, need someone to look at product improvement or want a full scale PMA Management and Development Y E A RS Program, HEICO has the perfect solution tailor made for you. In addition to our 6,000 PMA parts, HEICO offers state of the art component repair and distribution facilities to help reduce your costs. With a 50-year track record that speaks for itself, it’s easy to see why HEICO is the number one choice of the world’s largest airlines. So, if you need a partner that’s trusted in the air to keep prices on the ground, contact HEICO at (954) 744-7500 or visit S I N C E 19 5 7 www.heico.com.
  10. 10. An aero engine’s life cycle can be divided into three main stages: the financial, management and trading phases. Careful and far-sighted management is necessary to balance maintenance cost against operational risks whilst maintaining maximum asset value as the engine progresses through these different periods.Managing engines wiselyE verything is rosy during the ‘honey- processes are safely and adequately working), best life-limited part (LLP) management phi- moon period’, the first years of an aero the operator has no more engine management losophy.” engine’s life cycle and main part of the responsibility.initial financial phase. The power plant has But this sweet, uncomplicated life typically Power-by-the-hourbeen freshly delivered from the OEM and comes to an end after approximately seven A power-by-the-hour (PBH) or total supportmated with its original operator who will gen- years; although this does depend on the type agreement with the OEM or an MRO provider iserally be able to enjoy its daily faithful, rev- of aircraft and its utilisation. At this point the one option for the operator. This would allow con-enue-creating service without worrying much engine is taken off wing for its first scheduled tinued flying without assuming the responsibilityabout prolonged and expensive mainte- maintenance shop visit. The OEM’s warranty of balancing maintenance costs against opera-nance. Premature engine removals for com- begins to expire in individual areas, and its tional risks and determining the maintenanceponent deterioration should be covered by financial support starts to dwindle. The engine planning. Normally, the engines stay in the serv-the OEM as part of its product warranty, and becomes ‘adolescent’, as David Garrison, MD ice of the initial operator as there is only limitedeven foreign object damage (FOD) events engine and component maintenance at Delta aircraft remarketing taking place at this point inmight fall under a separate insurance policy. TechOps in Atlanta, US, puts it. For him, the time. The operator can pay the OEM/MRO anTypically, the OEM will also make guarantees operator has to take on more responsibility for individually arranged, flight hour-based rate forfor fuel consumption, piece-part life and reli- the power plant’s maintenance planning in this their technical support services and concentrateability, especially on new-generation equip- second part of the financial phase. Garrison on its main business of providing air transport.ment, and possibly even commit to cost per states: “During this phase one will be actively For example, Delta TechOps’s PBH contractsflight hour and/or flight cycle. Apart from managing the unscheduled engine causes and usually include fleet removal forecasting, serviceensuring compliance with the regulatory determining the engine’s true capabilities bulletin modification and inspection recommen-requirements and keeping a moderate level based on the current design and the owner’s dations, on-wing engine condition monitoring,of technical oversight (to make sure the [airline or lessor] operating parameters. and the development of a maintenance pro-required maintenance and operational During this phase one is also analysing the gramme, according to Garrison.10 The Engine Yearbook 2011
  11. 11. During the initial ‘honeymoon’ period of an engine’s life cycle, its maintenance is largely determined by the OEM’s product warranty policy andguarantees, and the operator/owner does not need to manage an engine plan. However, even apparently comprehensive ments,” explains Steve Froggatt, engineering objectives of its owner, if it is a leased engine,packages do not necessarily cover all eventual- manager at TES Aviation. “We won’t always go is the first step for any technical managementities that might concern an aircraft operator or for time and material if the power-by-the-hour team before determining the future mainte-owner. “One comment about total support is contract makes more sense. It all depends on nance plan.that all too often it is not really total support,” the engine, operator, any specifically harshremarks Karl Gibson, operations director of operating area or condition.” Management phaseTES Aviation, an aero engine management com- For Abdol Moabery, CEO and president of GA This becomes increasingly important as thepany based in the UK. He highlights that total Telesis, an aircraft asset management firm, engine progresses from the financial phasesupport and PBH agreements always carry component supplier and maintenance provider into the management phase. By then the pow-exclusions and might not cover certain work; in Fort Lauderdale, Florida, the issue comes erplant is between 12 and 15 years old, mayFOD removal as an example. These extra-con- down to whether the operator wants to make have transitioned from one operator to thetractual maintenance events have then to be regular payments to a PBH/total support next, its PBH/total support contract may beaccomplished on the basis of their individual provider for the maintenance in advance or pay expiring, and it will need to come off-wing for its(man hour) time and material cost require- for the individual events as they come along. second, third or fourth shop visit. All productments. In that case the operator incurs both “The provider of that [PBH/total support] serv- warranty and guarantees have finally expired,the cost of the regular PBH/total support pay- ice is accumulating cash for a 10 or 15-year and the maintenance plan is no longer gov-ments, whether any regular maintenance work programme. Some airlines view that cash as erned by the OEM’s product and repair devel-has actually been done or not, as well as the important to their business [now]. So they opments. There will be a range of alternativeindividual time and material-based payments don’t want to pay up front and would rather just PMA parts and DER repairs available on thefor the additional work. Hence Gibson argues do it as time goes by.” market, which will give the operator/ownerthat, in order to forecast the entire MRO expen- Whatever decision is eventually made, it is some choice to tailor the future maintenancediture for an engine over a given period of time, of fundamental importance to get a clear under- plan to its individual needs. “The managementthe operator has to make an analysis of likely standing of the full maintenance cost that is phase is where most change is going to taketime and materials cost in the first place, irre- likely to be encountered throughout the pro- place within an engine and its value,” statesspective of whether the company then decides posed service period for the engine. Although Froggatt. “The management decisions oneto sign a PBH/total support contract or not. these expenditures can vary substantially makes at that particular point, for a number of This does not mean that a PBH/total sup- between different operators and equipment, shop visits, is going to dictate the residualport agreement won’t still be the best option. they can nevertheless be predicted with great value when one gets towards the trading phase“We look at what is best for our customer’s precision over long periods of time. Analysing [when the engine will eventually be disassem-requirements and do studies across a number an engine’s remaining life cycle in light of its bled to serve as a parts source]. As the lessor,of maintenance cost per flight hour agree- operational requirements and the financial one is looking more into the asset value,12 The Engine Yearbook 2011
  12. 12. deterioration can be expected in terms of both extent and rate. Establishing the fuel flow and exhaust gas temperature (EGT) parameters will allow the management team to outline an initial overhaul strategy, according to Moabery. “As turbine blades get older, the wear starts to cause EGT margin degradation, and the engine will very quickly move from a strong performing engine to one that operates with no EGT margin.” Once all these parameters have been deter- mined, it becomes possible to predict which maintenance tasks will be necessary in the future, what this will cost, what options the operator will have to control its spending, and how this might be affected by additional, unscheduled maintenance. “We run those engines forward on our system which allows us to forecast all the events. We would work-scope each engine individually as a paper exercise and identify what the costs were against the critical elements within that work scope, what the material costs would be based on the material standard that is in there [the engine],” explains Gibson. “We would include all the unscheduled events that could potentially hap- pen, lease costs, everything ... and we would give them effectively what the cost per hour of their operation would be.” If it is a leased engine, the interests between the operator and owner are likely to diverge as indicated above. The airline might only be con- tractually obliged to release the engine with a certain life left on it at the end of the lease agreement. This would allow the company to minimise the workscope accordingly to reduce its costs during the lease period. On the otherTrading phase: when the value of the individual parts and components exceed the book value of a hand, however, the lessor will be looking at thecomplete engine, it is teardown time and the asset will serve as a spare part source. cost of operation over the entire ownership because one is looking at the end and what period, which might go long beyond the original one wants to do with the asset. The operator, operator’s lease agreement. The lessor will want specifically, is looking at the cost per hour, to enhance the workscope as much as possible because that’s what it is all about to turn a in order to maintain a high asset value. This profit.” would make it more attractive and marketable to The main factors in the assessment of an other operators who might lease the engine in“The risks of operating PMA engine’s remaining life cycle, which will indi- the future. The two parties have then to find some common ground to keep the cost per hourparts are vast. The risks are cate how long the engine may be able to stay on-wing until the next shop visit, are aircraft of the engine at a level that is acceptable forcalculated over a fleet of utilisation, the status of the LLPs and their both. If the lessor demands a technical standardengines. So in the case of an remaining flight hours/cycles, the mainte- that is significantly higher than what is neces- sary to the operator, one solution could be thatairline with a vast fleet, one nance history, and the airworthiness directive the lessor makes a contribution to the mainte- (AD) status. If the analysis is performed fromcan look at that risk and an operator’s perspective who has leased the nance cost.decide it is worth doing. But engine, the length of the proposed service The use of PMA parts and DER repairs, period is another major determinant. External instead of the standard OEM material andthe small operator may look at processes, is clearly one, if not the, most impor- engine management consultants are typicallyit and say, ‘for the cost savings engaged in contracts over three or five years. tant and powerful means to reduce engine main-that I save, it’s not worth it’. Engine trend monitoring data at different tenance costs. However, while their use has power settings (usually idle, take-off and been widely established throughout Western— Abdol Moabery, CEO and Europe and North America, this is not neces- cruise) will provide a clear picture of thepresident, GA Telesis power plant’s current performance and what sarily the case in all other regions. PMA parts14 The Engine Yearbook 2011
  13. 13. The use of PMA parts and DER repairs instead of the standard OEM material and processes is one of the central questions when an engine enters themanagement phase and the future value strategy is determined.can become an obstacle when trying to find a an overhaul. The engine’s technical standard capacity, the older, less efficient aircraft are thelessee for an overhauled engine, for example, in and performance has been surpassed by its first ones to stay on the ground. “A good exam-China and India — two future growth markets. younger counterparts in the fleet, and possibly ple right now is the CFM56-3 model [for 737 But even within the boundaries of jurisdic- even by new-generation equipment that has Classics], where there are so many sparetion of the FAA and EASA, the cheaper alterna- emerged in the meantime. Furthermore, there engines available in the market that an operatortive repair materials and processes might not will be an increased number of other engines of may decide to run off ‘green-time’ on a leasedalways pay off either. In light of the increased the same type and similar age on the market, engine as opposed to putting in $2-3m to repairoperational risk of using PMA parts and DER which have been phased out by other operators the original engine,” reports Moabery.repairs, the potential cost savings might be and have consequently brought down engine While the deferral of maintenance andconsidered much less tempting for an airline lease rates and spare part prices. Not only using-up of surplus engines will help to drivewith, for example, 10 aircraft than a carrier with does it then become cheaper for the operator older equipment permanently out of the mar-a fleet of 100 aircraft. “The risks of operating to swop an engine against a leased one rather ket, it would be a short-sighted waste of mate-PMA parts are vast,” believes Moabery. “The than to repair or overhaul it, indeed there rial and finances to take advantage of aircraftrisks are calculated over a fleet of engines. So comes the point where the value of the individ- capacity cuts in the current economic climatein the case of an airline with a large fleet, one ual parts and components exceed the book and apply the practice to younger equipmentcan look at that risk and decide it is worth value of the complete engine. It is teardown too. Garrison warns: “In the airline industry,doing. But the small operator may look at it and time at this point and the engine will serve as economic cycles are a way of life and have asay, ‘for the cost savings that I save, it’s not a source for spare parts. significant impact on an airline’s budget sensi-worth it’. If I have a major engine failure or a The dynamics of the trading phase are sub- tivities. The airline industry is a cash hungrycatastrophic event, then all of those savings ject to the economic conditions at the time. In business and during an economic downturn,are wiped out by one event.” periods of growth, when queues before airline airlines work hard to preserve cash. This check-in desks and OEM sales offices are long, stance can make engine management very dif-Trading phase the service lives of older aircraft are stretched ficult, because you will need to invest in your At approximately 20 years of age, the too, and consequently lease prices for older fleet during the shop visit to make sure thatengine enters into the trading phase, the final engines with some residual ‘green-time’ are sta- you build in the goodness to obtain your enginepart of its life cycle. By this time, the value of ble. ‘Green-time’ is the available period during run time and reliability plan. Airline customersthe entire aircraft is mainly driven by the engine which an older engine can remain in service who do not maintain the investment disciplinevalue. Ironically, however, the book value of the until its last maintenance records expire and it during the economic downturns can expectpower plant in itself is coming down so far at will be torn down. Conversely, when the industry their cost per hour and total cost to increase inthis point that it no longer warrants the cost for goes into a downturn and airlines are cutting future years.” I The Engine Yearbook 2011 15
  14. 14. Spare engine financing Just as the aviation industry was showing signs of economic recovery the ash cloud descended and traffic figures slumped. It is hardly surprising that there is a reluctance to invest but there are, as Jon Sharp, president and CEO of Engine Lease Finance Corporation, writes, some reasons for optimism. T o say that the second quarter of 2010 did values. Reduced flying means less MRO work not present a great outlook for aviation and less demand for spare engines; all the finance is an understatement. Last year engine lessors have equipment available for saw the largest decline in air traffic since WWII. immediate lease and rentals have dipped That was already on top of a massive traffic accordingly. decline in 2008. Record losses were sus- Longer-term, the leasing companies have tained, according to IATA, and prospects remain had to accept that certain aircraft and associ- poor for this year. Airlines reacted quickly by ated engine types have suffered a permanent cutting capacity: routes were culled and fre- reduction in value, which demands a write-down quencies reduced; new aircraft deliveries, on their balance sheets. However, new aircraft where possible, were delayed or even can- types are overrunning on costs and timescales, celled; and large quantities of existing aircraft which prolongs the valuable life of some older were parked in the desert, with the emphasis aircraft types, at the same time as introducing on parking the less efficient aircraft and an more uncertainty into residual value prediction. obvious attendant downwards impact on their As if that was not enough, oil prices remain16 The Engine Yearbook 2011
  15. 15. ENGINE LEASING POOLING TRADING Conserve your capital The means to keep your Buying and selling engines spares working for you Customized lease terms to Purchase / leasebacks suit your requirements Easy access to spares when you need them Convert non-liquid assets All engine types to cash Online leasing reservation Short-term, long-term, AOG system Pre-approved terms and conditions WILLISLEASE.COMCONTACT US TO: LEASE BUY SELL POOL EXCHANGEAOG 24/7 SUPPORT +1.415.408.4769
  16. 16. Lessors like to receive maintenance reserves as the airline burns value off the engine asset volatile thereby introducing yet more uncer- and cycles of the economy, both at regional tainty into residual values in the shorter term and global level, by absorbing some of the (and airlines face the risk of making losses pain when times are bad. solely from backing the wrong hedging policy,Leasing companies have had which does not help them or their lessor part- Air finance and engines ners). Small wonder then, there has been a flightto accept that certain aircraft of capital from the air finance industry with only Through capacity cuts, load factors wereand associated engine types maintained in a reasonable range, but yields a few of the cannier banks hanging on in there.have suffered a permanent suffered badly; the special offers made by the Even now, with signs of global economic recov- air carriers to attract the flying public back ery quietly but steadily emerging , the upturnreduction in value, which into their seats meant that prices were for the airline industry has been confounded bydemands a write-down on their slashed and revenues suffered, although the ash cloud hanging over much of Europe;balance sheets. However, new there is now evidence that fares are creeping the scientists tell us that the eruption may go back up to sustainable levels on key routes on for many months and we are in for a periodaircraft types are overrunning such as the North Atlantic. The airlines need of randomly disrupted air travel. In the secondon costs and timescales, which these revenues and their suppliers — the half of 2010 we are faced with a crisis in the leasing companies — are relieved to see it euro zone and the concern that Greece’s eco-prolongs the valuable life of happening; the airlines in the Northern hemi- nomic problems will become contagious, lead-some older aircraft types, at sphere at least need to earn substantial sur- ing ultimately to a double dip world-widethe same time introducing pluses in the summer months to see economic recession. The industry continues to themselves through the lean winter months. stagger through these and similar problemsmore uncertainty into residual and reluctance to invest continues. It is during the winter that defaults on rentalvalue prediction. payments are most frequent, due to cash The real problems with air finance have shortages. Most leasing companies are hav- been largely disguised by the continuance of ing to deal with delinquencies and even very low interest rates thanks to the interven- defaults or bankruptcies — as such, being tion of various governments following the between the banks and the airlines, they pro- global credit crunch. The banks that have vide to the industry an essential mid- supply funded the industry have done so because they chain buffer that helps modulate the peaks can charge high margins as a result of low18 The Engine Yearbook 2011
  17. 17. underlying interest rates; low base rates willnot last forever, however, and without a struc-tural overhaul of the financial system, theindustry will only struggle on. Some bankshave now returned to the fray and somestrongly funded leasing companies are still writ-ing new business, but there remains a fundinggap for new deliveries of aircraft and engines.There is also the small matter of several verylarge leasing companies looking for a buyer. The banks, not surprisingly, favour loansguaranteed by the Export Credit Agencies(ECAs), who have hugely increased their partic-ipation in the last year or two (ECGD [UK exportcredit agency] will probably guarantee twice asmuch in 2010 as they have in previous years)but the ECAs cannot alone sustain this gap inaircraft and engine financing markets, nor canthe Original Equipment Manufacturers (OEMs).The leasing companies are next most attractiveto banks, who by lending to a lessor against aspecific asset will have a clear mortgage on anidentifiable piece of metal that is being man-aged by the lessor to maximise its future value.Thus the lessor is an essential part of the sys-tem, yet current OEM behaviour is actually dis-couraging to this form of external finance rightat the time when the market needs it most. Manufacturers such as Rolls-Royce are becoming increasingly concerned with aftermarket support. OEMs muscle in on the aftermarket To explain: the OEMs spend vast amounts who now have to review OEM risk as well as air-of R & D in developing a new engine and need line balance sheet risk.to recover those costs not just from new sales,but from the lifetime spares sales and MRO Secondly, there are concerns about theservices. They are understandably getting portability of the fund. When Airline A has fin-more and more possessive about their after- ished his lease, does the OEM pay the total Lower labour costs available inmarkets, and preventing the use of non-OEM remaining amount of the fund to the lessor and Asia Pacific and South Americaparts and repairs (PMA and DER) whilst can the lessor transfer the benefit to his nextsqueezing those leasing companies and MROs customer, Airline B? Possibly not, but even if make them attractive regions(Maintenance and Repair Organisations) and so, is the amount collected enough, given that to develop MRO facilities withparts suppliers who are not owned or part- (a) the hourly and cyclic rates will probably have all the associatedowned by them. Fair enough. Unfortunately been set at a concessionary level to win athe increasingly common OEM inclusive main- sales campaign, (b) with respect to engines at infrastructure. China, Japan,tenance packages are not friendly to non-OEM least, depending on the package structure, the Brazil, Russia and otherowned leasing companies and so reduce the level of payments may refer to a first run and countries with aspirations toamount of finance available from them. The so not reflect true averaged lifetime cost andproblems leasing companies have with OEM (c) the two airlines A and B may have very dif- develop commercial aircraft‘Inclusive Care’-type maintenance packages ferent operational profiles meaning that rate and engine manufacturing havefall into three categories: may not be enough overall and Airline B would have to pay ‘catch-up’. Some aircraft inclusive an opportunity for a fresh start The first is the matter of security. The les- maintenance agreements do not even separate and should take note and thinksor likes to receive maintenance reserves as out the rate for engines from the total. about the structure of theirthe airline burns value off the lessor’s asset, tooffset credit risk. With an inclusive mainte- Thirdly, there is the choice of MRO industry and how theynance package, the OEM and not the lessor, provider. With an OEM maintenance pack- interface with the financialreceives the reserves and holds them in a age, there is no choice and the asset has to community.fund, so the lessor’s security is at least dimin- go back to the OEM or its nominated serviceished or even becomes non-existent. Also the provider. Airline B who wants the availablelessor is exchanging airline risk for OEM risk, aircraft/engine from the lessor but is alreadyadmittedly in some cases a better credit, but it locked in to a long-term maintenance pro-is the concentration of such risk in one MRO gramme with a third-party provider will findprovider which is worrying to credit committees his choice of equipment restricted and the The Engine Yearbook 2011 19
  18. 18. lessor simultaneously find his re-marketing region, with growth in China continuing but at options restricted. a slightly less frenetic level (which does give So the OEMs (engine OEMs in particular), by more confidence of avoiding a nasty bubble). increasing their efforts to sell inclusive mainte- There is much press about the new aircraft nance packages are driving away the remaining types coming out of the Asia Pacific region.The ECAs cannot alone sustain independent sources of finance for their prod- Abu Dhabi is investing heavily in the MRO sec- ucts; does this mean they are moving to a tor not only in the Middle East but also in thethe gap in aircraft and engine West. Lower labour costs available in Asia model where they keep the engines they pro-financing markets, nor can the duce on their own balance sheets? Is this Pacific and South America make them attrac-OEMs. The leasing companies really desirable? The trend is certainly grow- tive regions to develop MRO facilities with all ing and some OEMs are talking about selling the associated infrastructure. China, Japan,are attractive to banks, who by ‘power only’ for the next generation of engines. Brazil, Russia and other countries with aspira-lending to a lessor against a These new engines will be designed to have a tions to develop commercial aircraft and engine manufacturing have an opportunity forspecific asset will have a clear fixed life with all LLPs at the same limit as the expected power restoration interval and an air- a fresh start and should take note and thinkmortgage on an identifiable line would pay a fixed amount for the engine for about the structure of their industry and howpiece of metal that is being that period of operation, before exchanging it they interface with the financial community. for another one, upon payment of another fixed The Chinese and Middle East airfinance mar-managed by the lessor to kets may well be largely be captive to their own amount. So there is never the matter of themaximise its future value. Thus ownership of the engine passing from the OEM. banks and Sovereign Wealth Funds, but whatthe lessor is an essential part Nothing for a bank to have security over and the Western leasing companies do have is a nothing for a lessor to own. I also wonder how wealth of expertise and it is that which can beof the system, yet current OEM allied with the new wealth to create new, suc- an ECA can participate in such a structure.behaviour is actually The inevitable conclusion is that new style cessful partnerships.discouraging this form of relationships between OEMs, the financial com- So, a new business model is needed. A munity and MRO organisations are essential, simple conclusion is the airfinance industryexternal finance right at the not just for the benefit of those three parties, needs new, fresh thinking alliances betweentime when the market needs it but also for their customers, the airlines. the airlines, lessors, OEMs and MROs on the one hand and new alliances of old expertisemost. Whatever signs of economic recovery in the aviation industry there are have been led by and new money on the other. A really enlight- the Middle East traffic growth, albeit from a rel- ened approach would be to combine the two. atively small base, and in the Asia Pacific Somebody has to make this happen. I20 The Engine Yearbook 2011
  19. 19. ? If not than ied rtif d o e it Nc noAre you AL N w.. ALified . Cert
  20. 20. The evolution of low-emissionscombustion chambers incommercial aircraft engines,1990 — 2010 During the 1990s the aerospace industry was forced to confront the world’s growing environmental awareness, which manifested itself in tougher certification requirements for aircraft engines and the introduction of local environmental regulations, particularly in Europe. David Cook, President of ASM Consulting, was sales director at CFM International from 1989 to 2001 with account responsibility for Northern Europe. Through sales campaigns at Austrian Airlines, Swissair, SAS and Finnair he saw firsthand how the aero-engine industry responded to demands for cleaner engines which, in turn, explains why the industry is so well-equipped to meet the challenges facing a new generation of commercial aircraft engines.A s mass air travel started to develop in responsibility of the Committee for Aviation at airlines such as SAS, Braathens SAFE, the 1970s the public, particularly those Environmental Protection (CAEP), established Finnair and Icelandair, I came to understand the living around airports, became more and in 1983, which published its first set of regula- fragile nature of the Scandinavian environmentmore vocal in their concerns about aircraft tions (CAEP 1) in 1988. and how much it is under threat from externalnoise and atmospheric pollution. Images of After training and serving as a technician in sources of pollution such as large power sta-earlier generation four-engined jets heading for the Royal Air Force, followed by a number of tions in other parts of Europe. While they coulddistant destinations with engines bellowing years with a British regional aircraft manufac- not do much about external sources they werelong plumes of smoke are emblematic of this turer, I was recruited by Snecma to join the CFM determined to protect themselves from internalperiod. By the late 1970s the International Civil sales team with specific responsibility for sources, developing the ‘bubble’ conceptAviation Organisation (ICAO) decided to act by Scandinavia. It quickly became apparent that whereby any new industrial project was requiredbringing in limits for aircraft engine noise and environmental issues were a principle concern to account for all emissions generated by itspolluting emissions, defining certification stan- for my new customers, one clue being that the activity. It was as a result of this philosophy thatdards for Nitrous Oxides (NOx), Unburned president of the one-time Swedish domestic air- the world’s first local emissions legislation wasHydrocarbons (UHCs) and Carbon Monoxide line Linjeflyg had his environmental advisor applied to Swedish airports in 1990, limiting(CO). These standards were put under the located in the office next to his! Meeting people NOx emissions emanating from all aspects of22 The Engine Yearbook 2011
  21. 21. the airport’s activities and initiating charges foraircraft movements dependent on the aircraftengine’s certified NOx emission levels. Whileground vehicle activity, in particular private cars, NOX emission levels (g/kn thrust - LTO cycle)was clearly the main source of airport NOx CAEP 4 limitsemissions this concept was also aimed at cur-tailing, or at least penalising, movements of air- 80 CAEP 6 limitscraft with high NOx emitting engines. At around about the same time AustrianAirlines and Swissair launched an evaluation toreplace their ageing DC-9 fleets, finally select- Conventional combustorsing the Airbus A320-family as their preferred 60airframe. This gave them an opportunity to eval- TAPS / TALON combustorsuate both CFM56-5B and IAE V2500-A1engines in a competitive selection process. As DAC combustorsSwitzerland had recently followed Sweden’s 40example by introducing airport NOx emissions ? I?taxes the message from the airlines was clear onX PSI Tal TA— all other things being equal, they would Early turbofan enginesselect the engine with the lowest certified NOx 20 CFM56-5B4 familyemissions. The gauntlet had clearly been CFM56-7B26 familythrown down and it was up to the aero-engine IAE V2527-A5 familyindustry to respond.Controlling aircraft emissions 10 20 30 40 50 It is perhaps worth reminding ourselveswhat emissions are produced by an aircraft Overall pressure ratio (OPR)engine and how they may be controlled. As pre-viously mentioned, those emissions controlledby the engine’s certification process are NOx, As is often the case with anything to do with tively rich, providing high power and good fuelUHCs, CO and smoke. Limits for these emis- aircraft engines, the combustion chamber economy but generating large amounts of UHCsions are defined by ICAO dependant on the designer is faced with a multitude of conflicting and CO at low power settings. These pollutantsengine’s overall pressure ratio (OPR) and meas- priorities. He must make sure that maximum would be burned off as they moved into a rela-ured through what is called the landing and thrust is produced at takeoff, that maximum tively lean combustion environment when addi-takeoff cycle (LTO) ie: the sequence of events fuel economy is achieved at cruise, that the tional air was introduced further down thebeginning with start-up and taxi out to the end flame does not go out at high altitude or in combustion chamber. At high power settingsof the runway, engine acceleration to takeoff heavy rain ... and, of course, that the engine the NOx produced in this rich burn processthrust, through the takeoff run, up to 3,000 meets its environmental certification require- would be limited by quickly cooling, or ‘quench-feet on the climb-out, then from 3,000 feet on ments. In order to minimise UHC and CO pro- ing’, the combustion gases by introducing largethe descent to touchdown on the runway duction the combustion chamber needs to volumes of cooling air just downstream of thethreshold, the landing run, taxi in and shut- avoid producing these compounds by a highly burner flame. It is my understanding that thedown. Visible smoke consists of small soot efficient combustion process, or be able to work done IAE/Pratt and Whitney at this stageparticles in the jet exhaust and is created by burn off the by-products of inefficient, low-rpm, made a significant contribution to the develop-inefficiencies in the combustion process. combustion. In order to minimise NOx produc- ment of their TALON (Technology for AdvancedSimilarly, UHCs and CO are produced by ineffi- tion the combustion chamber needs to reduce Low NOx) combustion chambers which latercient combustion, particularly at low engine as much as possible the amount of air sub- equipped the IAE V2500 and PW4000 seriesrpm. The most important pollutant in terms of jected to the elevated temperatures of high-rpm engines.amounts produced and potential environmental operation. This is achieved by either limiting The CFM solution was to draw on a radicallyimpact is NOx. This is produced by an engine the volume of air subjected to high tempera- new combustion chamber design already in thewhen air (consisting of oxygen and nitrogen) is tures or by reducing combustion temperatures. prototype stage at GE (GE have design respon-subjected to high temperatures, particularly The problem facing CFM and IAE back in the sibility for the CFM56 engine core). Called theduring the combustion process, and decom- early 1990s was how to resolve these two con- double annular combustor, or DAC, it effectivelyposes. It plays many different roles in terms of flicting design requirements to meet the split the combustion chamber in two, each sub-its environmental impact: it is a recognised Austrian/Swissair challenge. chamber having its own fuel nozzle. The outerhuman health risk, promoting asthma and a Obviously, I was not privy to IAE’s proposal chamber was relatively long and operated atwide range of respiratory diseases and, in the but we at CFM were led to believe that their the lower thrust levels. This long chamber pro-presence of sunlight, NOx creates ozone at low solution revolved around modifications to an vided the time in the combustion process toaltitudes thus contributing to the greenhouse existing combustion chamber design. burn off UHCs and, together with a leanereffect. NOx is also very persistent, remaining in Conventional chambers function on the basis fuel/air ratio, reduced CO. At high thrust levelsthe atmosphere for many years after other pol- of what is called the Rich Quench Lean (RQL) both chambers were lit, providing the requiredlutants have either dispersed or decomposed. process. The fuel mixture at the nozzle is rela- levels of thrust but with a relatively shorter The Engine Yearbook 2011 23
  22. 22. The author at the delivery of the first SAS 737-600 equipped with CFM56-7B20 DAC engines, September 1998. The green flower logo was used by SASto promote its environmental strategy.chamber compared to the equivalent conven- ficult for them to agree on a replacement air- separated the two parts of the chamber. Totional chamber, thus reducing the time at which frame. As mentioned earlier, Sweden had their credit the airlines who selected the DACair was exposed to the high combustion cham- already introduced emissions taxes at its air- accepted this additional maintenance cost bur-ber temperatures (residence time) and so ports and so SAS took a great deal of interest den, as well as a healthy supplement to thereducing NOx. The design was complex and in the Austrian/Swissair engine selection engine list price, believing it to be a fair price tocould only be controlled by the use of an elec- process. It was therefore inevitable that, once pay to demonstrate their environmental cre-tronic fuel control system, or FADEC, in order to SAS had decided to replace its DC-9 fleet with dentials. In retrospect, it would probably be faircorrectly manage the staging of the two sets of the 737-600 aircraft, they too should specify to say that the -5B engine entered service withfuel nozzles throughout the flight regime. the DAC for their CFM56-7B engines. relatively few problems: some hot starts, someHowever, with its promise of over 30 per cent Finnair was another airline which later over-temping during taxiing, but no major diffi-NOx reduction compared to its equivalent sin- selected the DAC engine. While not subjected culties as far as I recall. As the -7B used thegle annular combustion design, and the fact to specific airport emissions taxes themselves, same core (HP compressor, combustion cham-that this programme had more credibility due to Sweden was an important market and they did ber, HP turbine) as the -5B CFM believed thatits advanced prototype testing, this was the not want to be at a competitive disadvantage they could confidently offer a -7B DAC to SASsolution selected by Austrian and Swissair. In with SAS. Having selected the Airbus A320- which would build on the Austrian/SwissairMarch 1995 the first CFM56-5B DAC-powered family to replace their DC-9s the decision was, experience and provide a ‘low risk’ entry intoA321 entered service with Swissair, the first of to some extent easier for Finnair as the service. This was not the case.a total of 375 DAC engines to go into airline CFM56-5B DAC engine had already been in Problems began even during initial engineservice. service with its launch customers for a couple testing. Austrian and Swissair were using their While Austrian and Swissair were the first of years. The first Finnair A321 with CFM56-5B -5B engines on A320 and A321 aircraft atairlines to specify low-emission engines for DAC engines entered commercial service on thrusts ranging from 25,000lb up to 31,000lb.their aircraft they were not the only ones inter- February 5, 1999. SAS had selected the 737-600 aircraft for theirested in the subject. During the 1990s there domestic and intra-Scandinavian routes and,were a number of attempts to create close Teething problems as such, the aircraft were expected to operatealliances between Austrian, Swissair, SAS and With such a complex combustion chamber with very light fuel loads, little baggage and inLufthansa. While these early negotiations did design, and the requirement to optimise the a relatively cool operating environment. Theynot reach a definitive conclusion they were to staging of the two sets of fuel nozzles, it was only required the -7B engine at its minimumlead to what is now known as the Star Alliance. inevitable that there would be some teething certified thrust of 18,000lb and, even then,Much of the discussion focused on fleet com- problems. From the start of the DAC pro- expected to operate with a significant derate.monality but, despite the fact that these air- gramme CFM recognised that this new cham- Despite the fact that the -7B core was thelines operated large numbers of Douglas DC-9 ber would generate additional maintenance same as for the-5B, this lower thrust provedand MD-80 series aircraft, it was extremely dif- costs due to erosion of the centre body which troublesome for DAC development. No matter24 The Engine Yearbook 2011
  23. 23. The CFM56-5B entered service with relatively few problems.how they tried the GE engineers just could not were replaced, unserviceable engines strippedget the -7B DAC to work correctly at 18,000lb down, turbine blades and disks rushed into thethrust. Get the NOx right and the CO would go laboratories for analysis. The problem was obvi-off the scale. Get the NOx and the CO right then ously related to LPT blade fatigue but what wasthe smoke would be uncontrollable. In the end the cause, and why had the other DAC opera-CFM were forced to accept that the -7B18 DAC tors not experienced the same problem? The The combustion chamberengine was not certifiable and agreed to pro- answer came from a careful analysis of SAS designer is faced with avide SAS with a -7B20 engine, 20,000lb thrust flight data and an understanding of the way multitude of conflictingbeing the minimum thrust level at which they they operated their 737 aircraft. DAC FADECcould get the DAC to work effectively. The software was programmed to schedule a fairly priorities. He must make sureengine was duly certified, the aircraft delivered clear ‘switch’ from single, outer burner opera- that maximum thrust isand the first scheduled flight of an SAS 737- tion at low rpm to double burner operation at produced at takeoff, that600 equipped with CFM56-7B DAC technology high rpm. What in fact was happening was that,took place on October 31, 1988 - ironically in operating their aircraft into congested maximum fuel economy isenough, on an early morning rotation between European airports, SAS were forced to fly long achieved at cruise, that theStockholm and Paris Charles de Gaulle. landing approaches at intermediate altitudes, stepping down into the landing pattern. This flame does not go out at high The -7B DAC quickly settled into service andseemed to bear out CFM’s claims of a reliable, forced the FADEC to keep switching the DAC altitude or in heavy rain ... and,derivative engine. However, during the long, from single burner operation to double burner of course, that the enginedark winter of 2000, worrying stories began to operation during the landing approach, thusemerge from the SAS flight line. An engine was inducing a resonance in the LPT disk which meets its environmentalshowing signs of high vibration and borescope weakened the LPT blade root. After more than certification requirements.inspection revealed that it had lost a low-pres- 1,000 cycles or so blades started to break.sure turbine (LPT) blade, sheared off cleanly at Alternative operating procedures werethe blade root. A few days later another engine rushed in to avoid ‘long, low’ approaches, LPTexhibited the same symptoms and, within a disks were re-designed and, over a period ofmatter of weeks, SAS had lost five engines. almost two years, engines were modified. ThisThis was clearly a serious problem and the full was a major challenge to both CFM and the air-weight of CFM customer support swung behind line but again, their willingness to resolve thethe effort to help this major customer. Engines problem and keep the DAC engine flying was a The Engine Yearbook 2011 25

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