Podcast: Gearing Up For AeroEngines Europe

Aviation Week's Lee Ann Shay, James Pozzi and Dan Williams gather to discuss the European engine aftermarket and what they're looking forward to at this week's AeroEngines conference in Hamburg.

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Lee Ann Shay: Welcome to the latest MRO podcast. Aviation Week's popular AeroEngines Europe conference, networking and sourcing event takes place next week, Sept. 9-10 in Hamburg, Germany. So as a sneak peek to it, we're here to provide a few insights today. I'm Lee Ann Shay, Aviation Week's executive editor for MRO and Business Aviation. And joining me are colleagues, James Pozzi, who is our MRO editor for the EMEA region, and Dan Williams, director of Fleet Data Services. James and Dan, welcome.

Dan Williams: Hi Lee Ann. Thanks for having us.

Lee Ann Shay: So to get us started, James, what do you think are the major developments in Europe's MRO segment in 2025 so far?

James Pozzi: Well, I think capacity, not a new topic of course, but I think that will likely be a dominant topic at AeroEngines. We are in a time of aftermarket network expansions in Europe. This of course is out of necessity. There is a lot of engine demand in Europe and despite the abundance of MRO providers and major Euro engine shops, that has been a challenge to them because there often has not been enough capacity to meet demand at its current rate. Of course, this focused a lot on new generation engines, so it's OEM-led engine MRO expansions and some of the examples of this, the CFM LEAP, we'll start with, we've seen Safran, of course, a partner in that joint venture program grow in Europe and Brussels for the LEAP. We've seen a new kid on the block popup of course this year in Cyprus with UAMCO in Larnaca.

They've set up a LEAP shop and that was done in impressively quick time and that's a very interesting addition to that network doing offload agreements for that engine. And then joint venture inaugurations of course such as GS in Poland, which has a LEAP focus, although that's been operating for a few years now. They formally inaugurated that facility in March. Then we'll move over to the GTF of the rival engine to the LEAP. ITP Aero in Bilbao, Spain joined the network this summer at the Paris Air Show. That was Aero, of course a joint venture between MTU Aero Engines and Lufthansa Technik opened a second test cell in Poland for the GTF this summer as well. Let's not forget the wide bodies of course. Rolls-Royce, of course there's heavy investments at Derby homebase and of course Dahlewitz in Germany, which for several years had focused on business engines.

That's now inducting commercial engines with a Trent 1000 entering its shop at the end of last year and that's continued to grow this year. And then there's GE Aerospace, of course they're investing heavily in Europe as part of a broader global investment in MRO, which is spanning nearly every major continent. So this is very interesting in terms of the growth, but I think some of the questions is how will this look long-term? I've heard a lot recently about maybe localized repairs in Europe. Will airlines look to utilize global networks still or will we see rather than these large mega facilities, these more localized shops across Europe? And that's something that we'll be talking about in the panel at AeroEngines and how that makeup's going to look and where these shops will come up. I think it's an interesting one because I know pre-COVID there was a push to nearshore base maintenance.

For example, back to Europe from the east. There was a lot of talk around that driven by several factors cost. There's the sustainability angle of course, keeping things close to home and I guess a customer desire to have parts in a more controlled and localized environment. Obviously the world has changed a bit since then in this time of tariffs and for example, and other geopolitical factors. Will we see more work done in region and more focus on that rather than utilizing global networks? So I think that's an interesting question. One I'll certainly raise next week with one of the panels I'm doing what do they see long term will work be handled on the fleet locally? Will there be a more balanced mix, for example, localized core work, but also utilizing global partnerships for maybe some of that work overflow and the specialized repairs or will it continue I guess, or will there be a global first outlook leveraging international networks, not just in Europe but further afield. So yeah, definitely a topic to ponder next week at AeroEngines Europe.

Lee Ann Shay: James, thanks for those insights. Really appreciate it. And Dan, you are working on Aviation Week's new fleet and MRO forecast with the new-gen engine types that James just mentioned gaining in fleet size and the market just frankly being so dynamic and growing overall, this has to make your forecasting job pretty exciting these days.

Dan Williams: Exciting is a word, right? Yes, it's a combination of things. There are pros and cons. We've talked about this at many of our previous shows and there's certain elements we are going to be talking about forever. Supply chain issues, supply chain issues, supply chain issues, get my bow out, ding, ding, ding. I will try and give you the lay of the land. You're right, we're doing our 2026 forecast and that's due to launch in a little over a month at our MRO Europe event. So please come and join us for that and I will be given a little preliminary preview at AeroEngines over in Hamburg and hopefully give you a little insight and I'll try and give you a small little insight today when it comes to these new gen, next gen, latest gen, whatever we want to call them engines. And that's still not settled on a name.

It's one of the above. There's still plenty of issues. The Pratt & Whitney GTF has still got quite a few on the ground. They've still got these durability issues that they're trying to work through, which is issue number one. Now we're seeing some of the durability issues of the LEAP now beginning to take effect in the global fleets. So we're starting to see a few more of those on the ground as they're trying to work out the LEAP-1A has a fix in place and is rolling out, not sure the LEAP-1B has yet got its fix in place, certainly not yet fully rolling out. So there's going to be some teething issues over the coming couple of years with those. When it comes to forecasting, there's a lot of CFM56s and to a lesser extent V2500s out there that ultimately need to be replaced as it were or need to be kept on wing because of the inability to deliver new aircraft and also the inability to deliver new engines.

Airbus have openly finally admitted that they're building some gliders. The number that they say they came out originally at 17, I think it was in July, then they say it's nearly 60 in August. I think the reality is it's probably closer to the three figure numbers as it stands today of aircraft that have been built that are awaiting engines because that's a different issue. You need to get these new engines, new aircraft into service because then that allows those older aircraft with those older engines, mature, legacy, whatever we want to call them to come out of fleet. But that's still not happening. So we're still going to be talking about keeping CFM56 going for the foreseeable future. It still will be an important engine within our industry. I just had a look at our preliminary in-service engine fleet numbers by just looking at the CFM56 and the V2500 as our mature legacy bucket versus the LEAP in GTF in our next gen latest gen bucket.

And in Europe we still see that inflection point of an in-service fleet changing over around 2029 where from that point onwards there will be more of the latest gen engines in service than the legacy CFM56 and V2500 engines. And when you look around the globe globally, that shift is slightly later because Europe's adopting these newer younger aircraft sooner, which brings their inflection point a little bit forward. So it's an interesting time. There's lots of headaches that come with it because we still don't have a reliable supply chain across the portfolio be that to keep older engines going due to the lack of tear downs in engines due to the lack of therefore USM use service material. There's still the reluctance for PMA in some engines for various different reasons, however slow but surely some of these things are changing and trying to get these CFMs through the shop and shop capacity is another issue that I'm sure we'll be touching on over in Hamburg and Workforce. And so there's lots of similar things and it's amazing how some things haven't changed over the past, what five years since pre-COVID.

Lee Ann Shay: See that's part of the reason why we need the forecast. There's the V2500 too, I think on the last earnings call, the RTX chairman, our CEO said that that is going to have probably a longer lifespan than they had forecasted a while ago too.

Dan Williams: Yeah, and that's great news for the MRO industry is keeping these, you make the money when the engines are a little bit older, right? You don't make the money when they're brand new. The OEMs don't make the money when they're brand new, which may be why the aircraft OEMs are building gliders.

James Pozzi: Yeah, and the V2500, actually I don't have the specific number. I remember hearing it a couple of years ago, so that likely has changed now, but I remember it still being quite a relatively heightened number for some of those engines that had yet to even undergo their first shop. So that's a lot of life in that engine.

Lee Ann Shay: Absolutely. So let's switch back to AeroEngines Europe in particular. Are there any sessions or tidbits that you're really hoping to glean?

James Pozzi: Absolutely, yeah, there's a few. First we're in obviously the headquarters of Lufthansa Technik in the home city. I think the keynote Derek Siebert who's vice president of engine service operations. That'll be very interesting for a number of reasons. I'm particularly interested in hearing him talk about how it's developing its engine network on both a local but also a global scale. Of course Lufthansa Technik have obviously a lot of reach in all parts of the globe seemingly, but that'd be very interesting and I'm sure there's a lot we can look at there and take from that. Obviously Lee Ann, your panel I think is very interesting or one of the panels you're doing the narrow body focus panel looking at ongoing demand for current generation narrow body engines and maybe how that's driving heavier engine work scopes. I think the speakers on that will have some interesting insights, a good mix there of course LHT but then United Airlines and Switzerland's SR Technics of course who have recently joined the GTF and they've also got the LEAP capability as well. So they'll have some interesting insights as well.

No doubt from my side, I'm moderating a couple of panels and one at the end of the day Tuesday we've had our prep calls for that and that looks like an excellent panel in terms of the lineup. We've got the OEM side Safran Aircraft Engines and then the MROs, MTU Maintenance and HAECO and then an airline MRO in TAP Portugal's a representative from their maintenance division. And we're going to look at those network expansions as I talked about at the beginning of the podcast and we'll really dive into how that's panning out. I suspect we already know some of the things that may come up, but certainly it looks like the dynamics might have changed a bit since last year.

Another one actually to keep an eye out for that I'm looking forward to is the panel on AI. Of course, this topic is pretty much a mainstay now of events in every conference. Now we feature something on AI, but rightly so because it seems to be moving at such a very fast pace. And again, I'll be interested to compare, I remember last year's panel I reported on the AI topic and it'd be interested to see what the progression is there and I think there's going to be some interesting use cases in that panel and how AI is being applied to maintenance operations and engine repairs. And you can imagine that would cover so many areas of an engine operation in the MRO side. From where I'm standing, it seems to have just moved at such a fast pace in I guess general life anyway. But certainly in aviation has more and more use cases by the months seem, let alone by the year. And I guess Europe as an innovator has been pretty proactive in other areas such as robotics, adoption. We've seen a fair bit of that in Europe, digitalization certainly. So yeah, be interested to also see where Europe as a region or a continent is comparing against, for example, Asia Pacific in terms of AI. I know that's a bit of a race to the top between countries and continents right now.

Dan Williams: In terms of panels. I'm looking forward to obviously my own because I'm clearly a narcissist in that respect. But there are some really good, I'm looking forward to Lee Ann's panel again, James, it talks about trying to find that balance between mature engines and next gen engines. The mature engines are great. You know exactly what you're going to get out of them. The new engines are great because they're going to give you so much efficiency, great for sustainability. However, there are still unknowns, but those unknowns are becoming less. So that's going to be really interesting. And again, the AI panel, the end of the day workforce will be an issue, is AI our way to help move away from workforce being a bottleneck within our industry. So there's some fantastic panels that I have to commend the conference team for putting some really interesting ones together. And it'd be great to reconnect with the community because after we've all had our Northern Hemisphere summer breaks, it'd be nice to see where we're at.

Lee Ann Shay: I agree with both of you and it's always a great event. Hundreds of people and good coffee and snacks too for networking. So it's just a great overall event. So, hey, so James and Dan, thank you so much for your insights and thank you to Guy Ferneyhough for producing this episode. Don't miss the next MRO podcast by subscribing to it wherever you listen to them. And one last request, please consider leaving us a star rating or writing a review. Thank you so much.