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$8.3 billion.
“That’s up from 45% in the
early ’90s; the growth has
been aggressive,” according to
Pratt & Whitney president
Louis Chênevert, who led the
transformation of the warranty
and spare parts adjunct to
engine sales into a comprehensive
MRO services business.
Pratt is now accelerating that
strategy, investing heavily in
engine repair and business software
technology (such as ERP,
logistics and analytical tools),
the ability to customize services
and products to win more fleet
programs, and targeting overhaul
and repair of rival CFM56
turbofans.
The supply of commercial
engines remains a crucial part of
Pratt & Whitney’s business, but
the company’s decision not
to invest in a new powerplant
for the Boeing 787 caused a
reassessment of priorities for
the future. It will be several
years until the soaring eagle gets
a chance to power the next generation
replacements for the
Boeing 737 and Airbus A320
single-aisle families; in the
meantime its installed base will
remain flat at around 14,000
engines as JT8Ds and JT9Ds
are retired and IAE V2500s,
GP7200s and PW6000s come
on stream.
Pratt currently maintains
about 20% of the V2500s and
aims to increase its share to
30% as another 1,000 engines
join the 2,500 already in airline
service. The record $2 billion
fleet management contract
signed last year with United
Airlines covering more than
300 V2500 engines added about
two percent to its market share.
But maintaining the new
engines alone will not fuel
double digit growth so Pratt is
also looking to service the
CFM56, of which 18,000 will
be in service within the next five
years. Full repair capability on
all models will come on stream
at the end of this year, and Pratt
intends to fill gaps in its worldwide
CFM56 overhaul network
in the U.S. and Asia.
Value is a driving watchword
in Chênevert’s office.
“We’ve developed great
repairs, great solutions that
allow us to package value for the
customer,” he says (repaired
parts typically cost half as much
as a new part; fleet management
can cut maintenance times and
lean out inventory).
“More and more customers
today want to see those value
solutions whether it’s an airline
or the chief executive of a company
who wants his business jet
maintained. Everywhere we are
seeing the demand for a comprehensive
service solution.”
That includes the military as
well as the airlines.
“Today we have partnered
with the military to provide a
value solution,” Chênevert says.
“The C-17 Globemaster III is a
good example—we and Boeing
maintain the whole system:
Boeing does the airframe, Pratt
(and partner United Airlines) do
the F117 engines—there are
more than 650 in the fleet. Even
through the war we’ve maintained
all the level of spares the
Air Force is looking for.
“We like that business model,
and I think it’s fair to say the customer
also sees the value.”
Chênevert cites Pratt &
Whitney’s company-wide ERP
system (by SAP) as a competitive
advantage. “We have a
single platform across the company
and our aftermarket
network. I tell you this is the
best tool set we have created in
the company that is so aligned
to understanding customer
needs,” he says.
Coupled with Pratt’s leveraging
its OEM engineering
skills in materials and coatings
to develop new repairs, Pratt
has two of the most powerful
tools possible “to give the best
value for the customer,” he
maintains.
None of it comes cheaply.
Pratt will spend significantly
this year on R&D and repair
technology in its services business,
a tenfold jump from just a
few years ago.
“We have invested significant
amounts of money on the
MRO segment,” Chênevert
says. “We spend major money
to create those value solutions,
and that’s why our market share
has grown.”
P&W president Louis Chênevert.
P&W Turns Up Heat on MRO Services
to be Company’s Engine for Growth
Pratt &Whitney MRO
“Aftermarket? Personally I prefer to call it
MRO services as this is a core business. It’s
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