Posted on: 12 October 2011 by Mark Howells
Rolls-Royce and Pratt & Whitney have announced the restructuring of International Aero Engines (IAE) with P&W buy R-R’s share and have also revealed a new partnership to develop next generation engines for mid-sized aircraft.
Under the terms of the agreement, Rolls-Royce will sell its equity and programme shares in IAE to Pratt & Whitney for $1.5 billion. Pratt & Whitney says it intends to discuss a possible offer of a portion of these shares with its IAE partners MTU Aero Engines (MTU) and Japanese Aero Engines Corporation (JAEC). In addition, Rolls-Royce will receive an agreed payment for each hour flown by the current installed fleet of V2500-powered aircraft for fifteen years from completion of the transaction.
Rolls-Royce says it remains committed to IAE and its customers and will continue to be responsible for the manufacture of high-pressure compressors, fan blades and discs as well as the provision of engineering support and final assembly of 50% of V2500 engines.
Since its creation almost 30 ago, IAE has approximately 4,500 V2500 engines in service and approximately 2,000 on order.
Meanwhile, Pratt & Whitney and Rolls-Royce have agreed to form a new partnership to power future mid-size aircraft (which they define as carrying 120-230 passengers). A joint venture company will be established in which each company will hold an equal share, to develop new engines for the next generation of aircraft that will replace the existing mid-size fleet.
The new venture is aimed at the rapidly-growing segment in which worldwide demand for around 20,000 new aircraft (or nearly 45,000 engines) is predicted over the next 20 years.
The two companies say the JV will focus on high-bypass ratio geared turbofan technology – a break in previously announced strategy by Rolls-Royce, with executives having previously declared that the company did not see such technology as the way forward. In addition, the venture will collaborate on future studies for next generation propulsion systems, including advanced geared engines, open rotor technology and other advanced configurations.
JAEC and MTU, partners of IAE and the PurePower PW1100G-JM engine for the Airbus A320neo, also intend to join the new collaboration.
“[This] announcement charts a clear course for the future of Rolls-Royce in the important mid-size aircraft segment,” said Mark King, president, civil aerospace, Rolls-Royce. “We are building on many years of successful collaboration with Pratt & Whitney in this segment to develop advanced aero engines, which we are confident will set new standards in aviation technology, performance and fuel efficiency.”
“These agreements position Pratt & Whitney, JAEC, MTU and IAE to best serve the needs of their customers for all A320 aircraft family,” commented Todd Kallman, president, commercial engines & global services, Pratt & Whitney. “We are delighted to collaborate with Rolls-Royce with its complementary capabilities as we look forward to the next generation of aircraft engines that will offer even greater operational and environmental benefits.”
Additionally, Rolls-Royce will make what is described as “a modest financial investment” in the PurePower PW1100G-JM programme.