Will Produce Parts For Competing Engine

It's the aviation equivalent to Pepsi agreeing to bottle Coca-Cola: Pratt & Whitney announced Wednesday the company will soon produce parts for a jet engine manufactured by rival General Electric Co.

The newly-formed replacement parts business, known as Global Material Solutions, already has its first contract: supplying parts for about 200 CFM56-3 engines flying on United Airlines aircraft.

Produced by a GE joint venture with Safran SA's Snemca Moteurs, there are more than 15,000 CFM56 engines flying worldwide in several variants. The initial contract covers only the original dash-3 produced in the 1980s, but Pratt & Whitney is looking ahead to more.

"We are now able to offer customers a dependable choice for 100 percent of their CFM56-3 materials at a competitive price," said Louis R. Ch Fenevert, president of Pratt & Whitney, to Newsday.

Pratt & Whitney admits an OEM making parts for a competitor's product is "somewhat unusual."

"It's a way for us to work with and establish strong relationships with airlines we don't do business with," said company spokesman Mark Sullivan, adding the new parts business is "not huge" relative to Pratt & Whitney's other projects.

It's a big deal, though, in the global scheme -- especially as Pratt & Whitney lost out on 737 business to GE in the 80s. After supplying JT8D turbojets for the original 737-100 and -200, the company did not produce an engine to compete with the CFM56 turbofan introduced on the -300.

Today, CFM International engines power all subsequent 737s, including Next Generation models. A dash-7 model is shown at right.

"The aftermarket is a lucrative one," said Paul Nisbet, an analyst at JSA Research Inc. "It's hugely high margin," typically between 30 percent and 40 percent.

"Taking that away from GE is no mean feat. It will be interesting what response, if any, GE has," Nisbet added.

So far, General Electric's response has been muted. Company spokesman Rick Kennedy said GE has spent millions of dollars to upgrade the CFM engine, improving fuel efficiency and lengthening its service life.

"That always keeps us a step ahead of the competitors," he said.

FMI: www.pratt-whitney.com, www.ge.com, www.cfm56.com