MTU Aero Engines expects its surging aftermarket business to double by 2030 and perhaps triple by 2035 as its primary revenue driver shifts from legacy IAE V2500 work to the blossoming Pratt & Whitney PW1000G geared turbofan (GTF) fleet and its overhaul network continues to expand.
“In the next five years, we target to double the MRO revenue to a number of about €10 million-11 billion [$11.8 billion-13 billion],” Chief Program Officer Michael Schreyogg said at the company’s recent investor day. “Going on with the investments ... on the [CFM] Leap engine, on the [GE Aerospace] GEnx engine in our new Fort Worth facility, we foresee a revenue potential of MTU maintenance of about €15 billion-16 billion.”
Continued expansion of all revenue streams will help drive growth at MTU, which generated €5.5 billion in revenue last year, excluding shares from joint ventures. But no platform will be more important than the GTF.
The engine program, which counts MTU as a major risk-sharing and aftermarket services partner, is expected to see twice as many sales as the V2500’s 7,800 units, MTU said. The revenue mix will change as well, from a heavy reliance on V2500 spare parts sales to a more blended maintenance approach for the GTF to control costs that are largely borne by the manufacturer.
More than 80% of the GTF fleet is covered under a long-term service agreement. This puts more burden on Pratt and its partners to keep MRO costs low.
“We now have started ... to really focus on MRO cost management,” Schreyogg said. “We [look to] repair parts instead of replace parts.”
The program’s maturation means less discounting to win customers. Add in surging demand for MRO on almost every platform, and service providers have even more pricing leverage.
“There are no launch customer prices anymore out in the market,” Schreyogg said. “And obviously, we have an opportunity to increase and improve our pricing given the current conditions.”
While the GTF will remain a prime focus for MTU, it will continue to invest in other platforms. Adding its new MTU Maintenance Dallas facility in Fort Worth, Texas, to CFM’s official Leap overhaul network is just one example.
“We are committed to invest in MRO,” Schreyogg said. “We are committed to invest in maintenance. We are committed to invest in more capacity.”
Related Content
