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Udvar-Hazy: Very Little 'bottom-line benefit' From Narrowbody Re-engining

posted Oct 14, 2010, 12:19 AM by Elaine Bell

Udvar-Hazy: Very little 'bottom-line benefit' from narrowbody re-engining

By Aaron Karp | October 14, 2010

Air Lease Corp. Chairman and CEO Steven Udvar-Hazy said this week in Munich that "it's hard to see a meaningful benefit" in re-engining A320s or 737s, Bloomberg reported. Speaking at the International Society of Transport Aircraft Trading's European Conference, the influential International Lease Finance Corp. co-founder and former chairman said, "When I look at all issues and all complexities, it's hard to see a meaningful benefit to the industry [from a narrowbody re-engining] other than in terms of the environment and noise emissions. There I see some PR benefit to the outside world, but in terms of bottom-line benefit to owners of the aircraft, to operators of aircraft, it's a very slim margin."

Boeing Corporate President and CFO James Bell indicated in late August that the manufacturer is unlikely to re-engine the 737, saying the potential fuel-burn improvement over today's narrowbodies does not look "sufficient enough" to justify a "business case" for doing so (ATW Daily News, Sept. 1). Airbus is expected to make a decision on whether to move forward with an A320 re-engining program within in the next 2.5 months (ATW Daily News, Oct. 7).

Asked to respond to Udvar-Hazy's comments, Airbus COO-Customers John Leahy said in a statement to Bloomberg, "If we followed the advice of some leasing companies, i.e., 'No Change,' we would still be flying 727s and consuming twice as much fuel. We, as an industry, have an obligation to be as fuel efficient and environmentally friendly as possible."

Among the leading candidates for re-engining programs, Pratt & Whitney has projected a 16% fuel-burn improvement over current narrowbody power plants for its PW1000G geared turbofan (ATW Daily News, April 1) and CFM International has predicted a 14%-16% gain for its LEAP-X (ATW Daily News, April 30).

 

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