P&W Looks To Military
By Michael Mecham 
Pratt & Whitney will rely on the strength of its military markets because there is so much uncertainty in commercial aircraft that it cannot assume a recovery as fast as the airline industry’s last three downturns.
“Things are pretty ugly right now,” President Dave Hess said in a briefing. The company laid off 1,500 last year, and “we know there will be more to come,” he said., United Technology will lose 11,600 of its 223,000 employees this year but it’s not yet clear how many of those will come from Pratt’s 38,000 eorkers.
Hess said an industy consensus estimates production drops in the 15%-25% range in 2010 as a combination of decining passenger and air freight demand and the difficulty of financing new aircraft purchases takes hold.
The company expects a 3% or more decline in passenger revenues this year. The decline is likely to exceed the depths of downturns in 1991 and 2001 and 2002.
Pratt & Whitney Canada has seen demand for business jet engines drop substantially. Regional engine sales have declined as well, but not as much.
Business jet utilization rates are down 11%, while used aircraft as a percentage of the fleet is at an all-time high of 65%, he said.
Much of the problem is attributable to uncertainty in the financial markets, Hess said. The massive federal interventon that’s coming in the Obama Administration’s stimulous is expected to break the financing logjam, but Hess isn’t sure when.
“Sooner or later that money has to leak into the equity margets,” he said.
But VP Tom Farmer, head of Pratt’s military engines, could offer a positive outlook. “This business is busy and continues to grow,” he said.
Commercial engines, Pratt’s largest business segment, is being hurt as cash-conscious airlines defer maintenance, said VP Todd Kallman.
While the company begins definition studies of what an advanced version of its PurePower geared turbofan will entail, it is willing to ride out the time it will take Airbus and Boeing to decide on a replacement for their 737 and A320 families, respectively, Senior VP-Engineering Paul Adams.
The GTF has become part of a “platform strategy” that allows the company to pursue a broad range of aircraft in the 10,000- to 30,000-pound class categories, he said. Its scalable core will allow a push into higher-thrust commercial engines or adaptation for military aircraft, where higher pressure ratios are required.
Pratt’s engine is powering the Cessna CitationColumbus, Mitsubishi Regional Jet and Bombardier CSeries. The Columbus will move Pratt & Whitney Canada into the heavy businessjet category for the first time. But Cessna’s sales are off 30% this year and are expected to dip further in 2010, Hess noted.
Photo: Pratt & Whitney
