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RR/EA Making Money On A380 Engines?  
User currently offlinefaro From Egypt, joined Aug 2007, 1610 posts, RR: 0
Posted (1 year 12 months 1 day 21 hours ago) and read 6551 times:

Given the relative sales success to date of the A380, I'm wondering whether RR and EA have yet broken even on their substantial investment in the plane's T900/GP7200 engines...


Faro


The chalice not my son
24 replies: All unread, jump to last
 
User currently offlineTW From Germany, joined Jul 2011, 65 posts, RR: 0
Reply 1, posted (1 year 12 months 1 day 20 hours ago) and read 6478 times:

Probably not, as the engine manufacturers often only make profit on maintenance and spare parts, not on the sale of the engine.

User currently offlinelightsaber From United States of America, joined Jan 2005, 13518 posts, RR: 100
Reply 2, posted (1 year 12 months 1 day 11 hours ago) and read 6007 times:
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Unlikely with current deliveries. In fact, certain that both are still recouping investment and will for years to come. By years, I do not expect break even before 2020 even if A380 production hits target. As TW noted, it is ancillary sales that make the profit. That takes a large number of engines in overhaul or receiving PIPs.


Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlinegigneil From United States of America, joined Nov 2002, 16347 posts, RR: 85
Reply 3, posted (1 year 12 months 1 day 11 hours ago) and read 5993 times:

So ultimately what we're saying is yes.  

NS


User currently offlinefaro From Egypt, joined Aug 2007, 1610 posts, RR: 0
Reply 4, posted (1 year 12 months 22 hours ago) and read 5640 times:

Quoting TW (Reply 1):
Probably not, as the engine manufacturers often only make profit on maintenance and spare parts, not on the sale of the engine.
Quoting lightsaber (Reply 2):

Unlikely with current deliveries.

Thanx for the feedback, I thought the fact that the A380 is a 4-holer would have made a difference.

So that also applies with RR for the Trent 500 on the A345/6 series as well...a lot of losses for RR there.

On another note, I always wondered why RR and GE participated in the A380 engine programs and then went out and developed new engines for the 787 in substantially the same thrust class. Seems a unnecessary duplication of R&D spending...or was it simply a fortuitous case of tight timing between the two aircraft?


Faro



The chalice not my son
User currently offlinefaro From Egypt, joined Aug 2007, 1610 posts, RR: 0
Reply 5, posted (1 year 12 months 22 hours ago) and read 5628 times:

Quoting TW (Reply 1):

Probably not, as the engine manufacturers often only make profit on maintenance and spare parts, not on the sale of the engine.

Since when have the engine manufacturers been applying this business model? You can only do this if you have substantial in-service engine volume so relatively recently I imagine? Also, who did it first?


Faro



The chalice not my son
User currently onlineastuteman From United Kingdom, joined Jan 2005, 10227 posts, RR: 97
Reply 6, posted (1 year 12 months 22 hours ago) and read 5609 times:
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Quoting faro (Reply 4):
Thanx for the feedback, I thought the fact that the A380 is a 4-holer would have made a difference.

It will  
Quoting faro (Reply 4):
So that also applies with RR for the Trent 500 on the A345/6 series as well...a lot of losses for RR there

I'd guess they sold around 600 engines. The biggest issue for RR I'd guess is how long these airframes stay flying

Quoting faro (Reply 4):
On another note, I always wondered why RR and GE participated in the A380 engine programs and then went out and developed new engines for the 787 in substantially the same thrust class

But they're not. The Trent 900/GP7000 are capable of much higher thrusts than the Genx and Trent 1000

Rgds


User currently offlinefaro From Egypt, joined Aug 2007, 1610 posts, RR: 0
Reply 7, posted (1 year 12 months 22 hours ago) and read 5577 times:

Quoting astuteman (Reply 6):
But they're not. The Trent 900/GP7000 are capable of much higher thrusts than the Genx and Trent 1000

AFAIK the 789's engines will be capable of +70,000 lbs thrust which is pretty much what the A380 engines are delivering today.

So I guess that you mean that with the A380, RR/EA really designed for the A389 and not the A388 as such. That's deferring their break-even point quite some time out in the future, not to mention incurring a big dose of additional uncertainty...


Faro



The chalice not my son
User currently offlinetdscanuck From Canada, joined Jan 2006, 12709 posts, RR: 80
Reply 8, posted (1 year 12 months 13 hours ago) and read 5240 times:

Quoting faro (Reply 4):
I always wondered why RR and GE participated in the A380 engine programs and then went out and developed new engines for the 787 in substantially the same thrust class.

The RR offering is still a Trent on both aircraft...lots of detailed differences but it's not an all new engine. I don't know how close the EA engine is to the GE90 but the GEnX is also a GE90 derivative so it also wasn't an all new engine.

Quoting faro (Reply 5):
Since when have the engine manufacturers been applying this business model?

Since about the 70's.

Tom.


User currently offlinegigneil From United States of America, joined Nov 2002, 16347 posts, RR: 85
Reply 9, posted (1 year 12 months 12 hours ago) and read 5158 times:

Quoting faro (Reply 7):
AFAIK the 789's engines will be capable of +70,000 lbs thrust which is pretty much what the A380 engines are delivering today.

75ish is what they do.

The GP7200 and Trent 900 are capable of much more. They're just not presently required to deliver it.

The GP7200 is rated, today, in the 82k range.

NS


User currently offlinelightsaber From United States of America, joined Jan 2005, 13518 posts, RR: 100
Reply 10, posted (1 year 12 months 2 hours ago) and read 4863 times:
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Quoting faro (Reply 4):
So that also applies with RR for the Trent 500 on the A345/6 series as well...a lot of losses for RR there.

Yes, but not that bad and soon they will make money assuming enough A340-500/600 see their first D-check. Most of the T500 has enough from the T700 to save money, albeit with a 'scaled core.' (New). In the Case of the A340, there are over 600 engines in service, so RR will probably make money.

There are only 92 A380s delivered. Even if all were from one vendor, that wouldn't be at a payback situation. (it typically takes 400 engines that have seen some extra ancillary revenue such as an optional PIP). Eventually the engine vendors should do well, but not at the current production rates.

Quoting faro (Reply 4):
I always wondered why RR and GE participated in the A380 engine programs and then went out and developed new engines for the 787 in substantially the same thrust class.

When Boeing held their competition for the 787, it was brutal. All 3 engine makers were invited, but Boeing made it clear only two would be selected. After receiving the first proposals, Boeing rejected all three saying better fuel economy was expected. Pratt proposed a GTF. Now Boeing didn't want to be a GTF experiment, so they pushed back at Pratt and demanded better fuel economy without the gearbox. RR and GE were willing to sign up for promises they have yet to meet.

Now some of that was technology coming down the pipeline. For the A380, everyone went fairly conservative. The GP7200 doesn't even have contra-rotation!    That is an easy 3% drop in fuel burn that was a given by the GP7200 launch, but new bearings were outside of the development budget.

So to meet efficiency RR and GE pushed the cores on the 787 to have less growth (running a core 'hot' is one way to increase efficiency).

Quoting gigneil (Reply 9):
The GP7200 and Trent 900 are capable of much more. They're just not presently required to deliver it.

   Tremendous growth designed in for the A380F/A389 (80m).

Quoting faro (Reply 5):
Also, who did it first?

Probably Pratt with the JT9D. That circa 1970 engine didn't break even until the late 1990s. Or maybe it was GE with the CF6. Either way, the model works. Whomever gets out a high volume prints money. (e.g., GE with the CFM-56)

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently onlineastuteman From United Kingdom, joined Jan 2005, 10227 posts, RR: 97
Reply 11, posted (1 year 11 months 4 weeks 1 day 23 hours ago) and read 4765 times:
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Quoting faro (Reply 7):
AFAIK the 789's engines will be capable of +70,000 lbs thrust which is pretty much what the A380 engines are delivering today.

So I guess that you mean that with the A380, RR/EA really designed for the A389 and not the A388 as such

That the Trent 1000/Genx have 111" fans and a higher bypass ratio (up to 11:1), and the Trent 900/GP7000 have 116" fans and a c. 9:1 bypass ratio should tell us that the A380's engines are considerably bigger and more capable.

As far as I'm aware both of the A380's engines have already been certified into the 82 000lb - 84 000lb thrust range.

We're going to have to wait for engines like the Trent 1000 TEN which will enter service in 2016 to see 78 000 lb from a 787 engine.

The answer to your question is "yes, RR/EA were asked to design the engines for the A380 to accommodate the A380-900, much as Airbus designed the entire airframe to do so  

Rgds


User currently offlinefaro From Egypt, joined Aug 2007, 1610 posts, RR: 0
Reply 12, posted (1 year 11 months 4 weeks 1 day 21 hours ago) and read 4619 times:

Quoting lightsaber (Reply 10):
Quoting faro (Reply 5):Also, who did it first?

Probably Pratt with the JT9D. That circa 1970 engine didn't break even until the late 1990s. Or maybe it was GE with the CF6. Either way, the model works. Whomever gets out a high volume prints money. (e.g., GE with the CFM-56)
Quoting astuteman (Reply 11):
That the Trent 1000/Genx have 111" fans and a higher bypass ratio (up to 11:1), and the Trent 900/GP7000 have 116" fans and a c. 9:1 bypass ratio should tell us that the A380's engines are considerably bigger and more capable.

Thanx for the detailed replies, much appreciated.

That JT9D break-even period freaks me out though. Practically 30 years to recoup your money on one single engine project: a big WOW there! That is one very very risky business...presumably they don't do this with military engines and price hefty R&D margins into the sales price up front. Difficult to see such practice generalised across the board in civil and military markets.

I wonder how long a break-even period RR/EA based their launch decisions re the T900/GP7200 on; probably something similar if they're counting on launch of the A389 to secure the requisite break-even volume.


Faro



The chalice not my son
User currently offlinetdscanuck From Canada, joined Jan 2006, 12709 posts, RR: 80
Reply 13, posted (1 year 11 months 4 weeks 1 day 6 hours ago) and read 4346 times:

Quoting faro (Reply 12):
That is one very very risky business...presumably they don't do this with military engines and price hefty R&D margins into the sales price up front.

Military sales are often cost-plus or include some kind of contract escalation terms...otherwise no OEM would touch them. The technology risk is just too high. This is why the cost of military programs keeps going up and the government just accepts it, rather than holding the OEM's feet to the fire. In the rare cases of fixed-price contracts (A400M comes to mind) the OEM's are terribly financially exposed.

Tom.


User currently offlineprebennorholm From Denmark, joined Mar 2000, 6534 posts, RR: 54
Reply 14, posted (1 year 11 months 4 weeks 1 day 4 hours ago) and read 4272 times:

Quoting lightsaber (Reply 10):
Whomever gets out a high volume prints money. (e.g., GE with the CFM-56)

GE and Snecma.

It's undeniable that CFMI has had quite some success making engines. But CFM56 isn't one engine design. There are at least four groups of very different CFM56 engines, and certainly not equally successful related to numbers produced:

-2 and -5A and 3.
-5B
-7B
-5C

...and they cover thrust rating between some 19 and 34 klbs. Those groups are at least as different as for instance an RB211-22 and a Trent 900.

Which brings us back to...

Quoting tdscanuck (Reply 8):
The RR offering is still a Trent on both aircraft...lots of detailed differences but it's not an all new engine. I don't know how close the EA engine is to the GE90 but the GEnX is also a GE90 derivative so it also wasn't an all new engine.

   Exactly. Sometimes a new engine variant involves picking off the shelf plus maybe a little scaling. Sometimes it's an entirely new research program. Often it is something in between.

All engine manufacturers must constantly climb to be on top of newest technology. Sometimes they use the advances to improve existing engines, sometimes they use it for new engine versions, and sometimes (seldom) for entirely new engine families. The main cost is constant research to stay at leading edge in the competition.

Neither A380 engines are anything revolutionary, but rather state of the art versions of rather conservative usage of known technology. Arguably biggest new thing is the T900 contra rotation, a first on airliners. But then RR ran the first military Pegasus engine with contra rotation on test back in 1959.

It's next to impossible to apply research costs directly to one single engine type. If for instance the T900 had not happened, then at least the contra rotation R&D costs would have been applied to the T1000, and if it hadn't happened either, then to the TXWB.

Like the CFM56 family it's fair to say that the RB-211/Trent family of engines has been a great success.



Always keep your number of landings equal to your number of take-offs, Preben Norholm
User currently offlinelightsaber From United States of America, joined Jan 2005, 13518 posts, RR: 100
Reply 15, posted (1 year 11 months 4 weeks 1 day 3 hours ago) and read 4227 times:
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Looking at the orders on Wikipedia, RR will eventually break even and make some money supporting the T900. (Note: Due to the fan redesign, I suspect RR spent enough money on the T900 that it will take a while to break even.) The GP7200 should make a small profit (due to selling over 500 engines).

Quoting faro (Reply 12):
That JT9D break-even period freaks me out though. Practically 30 years to recoup your money on one single engine project: a big WOW there!

Yes. But please remember the debacle of the 741 launch. Pratt had quite a bit of debt built up to pay off over the years. Pratt didn't exactly have a choice with the new 'economic model.'  
Quoting prebennorholm (Reply 14):
There are at least four groups of very different CFM56 engines, and certainly not equally successful related to numbers produced:

   And sharing a core saves costs tremendously. RR will make money someday on the T500, but not yet. But the CFM-56 had the benefit of having the core developed by the military (failed F-15 engine called the F-101). Which is why the early CFMs were possible. E.g., the DC-8 re-engine (IIRC, CFM-56-2). Both sides have benefited in the CFM alliance. Not only that, but GE engines heavily use SNECMA sub-assemblies.

Quoting prebennorholm (Reply 14):
If for instance the T900 had not happened, then at least the contra rotation R&D costs would have been applied to the T1000, and if it hadn't happened either, then to the TXWB.

   But if RR hadn't been launching new engines, they would have cut their R&D budget too...

Quoting prebennorholm (Reply 14):
f for instance the T900 had not happened, then at least the contra rotation R&D costs would have been applied to the T1000, and if it hadn't happened either, then to the TXWB.

What amazes me is how the GP7200 beat the T900 in fuel burn without contra-rotation! Much of it due to the highly advanced Pratt low spool. It might be derived, but it had the world's most efficient fan at EIS. The low turbine did very well too.

I know from my Pratt sources they were frustrated that GE wouldn't go contra-rotating or go with a variable fan nozzle on the GP7200. Both would have benefited the fuel burn (about 3% for contra rotation and 2% for the variable fan nozzle). One reason the T1000/GEnX had to be new engines. With both the new engines, they have *far* more advanced high compressors than the T900/GP7200. Due to the new compressors being at a much higher tip Mach #, they are truly new designs (although, perhaps not apparent to a casual observer).

To put it in perspective, the T1000 has a 52:1 pressure ratio vs. the T900 39:1. Quite a jump in technology.

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineflightsimer From United States of America, joined Aug 2009, 604 posts, RR: 1
Reply 16, posted (1 year 11 months 4 weeks 1 day 3 hours ago) and read 4196 times:

I'm sure Rolls Royce is nearly at break even with all those extra engines carriers had to go out and buy...

    



Commercial Pilot- SEL, MEL, Instrument
User currently offlinePM From Germany, joined Feb 2005, 6990 posts, RR: 63
Reply 17, posted (1 year 11 months 4 weeks 1 day 1 hour ago) and read 4146 times:

Quoting lightsaber (Reply 15):
The GP7200 should make a small profit (due to selling over 500 engines).

Well, RR have sold 450 T900s so there's not that big a difference. RR are probably also better positioned in terms of potential top-up orders.


User currently offlinelightsaber From United States of America, joined Jan 2005, 13518 posts, RR: 100
Reply 18, posted (1 year 11 months 4 weeks 22 hours ago) and read 4051 times:
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Quoting PM (Reply 17):
RR have sold 450 T900s so there's not that big a difference. RR are probably also better positioned in terms of potential top-up orders.

Agreed. Neither will roll in the money, neither will lose money. I concur RR is in a better position for a top off order and the A380 isn't done.

However, if there is an A389, I expect RR to switch to the TXWB. There is an engine that will make a great profit. (I'm floored no one has offered a competitor.)

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlinefaro From Egypt, joined Aug 2007, 1610 posts, RR: 0
Reply 19, posted (1 year 11 months 4 weeks 14 hours ago) and read 3819 times:

Quoting lightsaber (Reply 15):
2% for the variable fan nozzle

Thanx for all the details; a pleasure as always to read your posts.

ON another note and IIRC, PW declared recently that they were not implementing the variable fan nozzle on the PW1500. Probably a deferral I imagine; any insight into that issue on your side?


Faro

[Edited 2012-12-24 09:47:44]


The chalice not my son
User currently offlinelightsaber From United States of America, joined Jan 2005, 13518 posts, RR: 100
Reply 20, posted (1 year 11 months 4 weeks 12 hours ago) and read 3687 times:
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Quoting faro (Reply 19):
PW declared recently that they were not implementing the variable fan nozzle on the PW1500.

Bummer, that seems to be a done deal.  http://www.goodrich.com/gr-ext-templ...t%20Aerostructures/SKY09262012.pdf


I missed that announcement, so thanks for letting me know. The variable fan only really helps during cruise, so the C-series might have too short of a mission for good 'payback,' but I'm personally surprised at this decision. To me, variable fan nozzles are like contra-rotation, low hanging fruit once the technology is there.

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineprebennorholm From Denmark, joined Mar 2000, 6534 posts, RR: 54
Reply 21, posted (1 year 11 months 3 weeks 6 days 5 hours ago) and read 3325 times:

Quoting lightsaber (Reply 15):
...failed F-15 engine called the F-101...

Aeh, calling the F101 a failed F-15 engine....

Isn't that something similar to calling the CF6 a failed L-1011 engine? The F101 powers all B-1B bombers and a healthy part - maybe half - of the F-16 fighters.

But right, the F101 did lend its core to early CFM56 versions. The CFM56-2 and -5A were little more than mating the F101 core and the low spool from the Snecma M56 engine project.

The M56 (Snecma Moteur #56) was a projected engine to power the Dassault Mercure airliner, and should have given the Mercure a competitive range performance. But unfortunately development went way overtime, and Snecma gave up making their own core perform according to specs.



Always keep your number of landings equal to your number of take-offs, Preben Norholm
User currently offlineneutronstar73 From United States of America, joined Mar 2011, 538 posts, RR: 0
Reply 22, posted (1 year 11 months 3 weeks 6 days 4 hours ago) and read 3247 times:

Quoting lightsaber (Reply 15):
And sharing a core saves costs tremendously. RR will make money someday on the T500, but not yet. But the CFM-56 had the benefit of having the core developed by the military (failed F-15 engine called the F-101). Which is why the early CFMs were possible. E.g., the DC-8 re-engine (IIRC, CFM-56-2). Both sides have benefited in the CFM alliance. Not only that, but GE engines heavily use SNECMA sub-assemblies.

Ummm the F-101 was originally designed specifically for the AMSA project, which became the B-1. The F-15 was originally developed with the PW F100. The F101 was in no way a "failure."

Unless, by your metric, failed means having spawned the ridiculously successful F110, which powers about 56% of all USAF F-16s, most F15Ks and F15SGs, and recently the new-build F-15S?


User currently onlineastuteman From United Kingdom, joined Jan 2005, 10227 posts, RR: 97
Reply 23, posted (1 year 11 months 3 weeks 5 days 19 hours ago) and read 3082 times:
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Quoting neutronstar73 (Reply 22):
Unless, by your metric, failed means having spawned the ridiculously successful F110, which powers about 56% of all USAF F-16s, most F15Ks and F15SGs, and recently the new-build F-15S?

I'm pretty sure that was his point.......   

Rgds


User currently offlinefaro From Egypt, joined Aug 2007, 1610 posts, RR: 0
Reply 24, posted (1 year 11 months 3 weeks 5 days 16 hours ago) and read 2998 times:

Quoting prebennorholm (Reply 21):
Aeh, calling the F101 a failed F-15 engine....


To add to the above, and although not always the most reliable of sources, Wiki says "The F101 was developed specifically for the Advanced Manned Strategic Aircraft, which became the B-1A."

It would nonetheless be interesting to know whether the F101 was also in competition to power the original, 1972 release of the F-15 if anyone can oblige.


Faro

[Edited 2012-12-26 07:50:58]


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