combined French and U.S. operations will decline significantly in 2020. CFM declines to comment on numbers, but is expected to slash its 2020 target of 2000 LEAP-1’s by around half. Pratt & Whitney, now part of


Raytheon


Technologies, is similarly impacted across the board with production of the PW1000G geared turbofan reduced for the A220/A320neo families. Measures such as 10% pay cuts through year-end, as well as furloughs, are being introduced while research and development spending is frozen. The situation overseas reflects what


US OEM’s are experiencing. Rolls-Royce is adjusting to rate reductions announced by Airbus involving the Trent-powered A330no and A350-900/1000, as well as rate cuts for the Trent 1000-powered 787. The early retirements of the PW4000, as well as some CF6-powered fleets, is also significantly impacting German engine maker MTU.


Aerospace – MRO With approximately two-thirds of the world’s airline fleets, nearly 17,000 aircraft, having been placed into storage, the short to medium outlook for engine MRO is dismal. Approximately 45% of GE Aviation’s revenue comes from its aftermarket activity. Pratt & Whitney is similarly affected as commercial revenues have been hit by falling aftermarket revenues for the PW2000/ PW4000 and V2500. Over the past decade, Rolls-Royce has focused on the wide-body market, widening its exposure to reliance on the support revenue from aftermarket work on older fleets of 747 and 777s as well as older A330s. With full-time premature retirement a possibility, the company can no longer bank on the expected rebound in deferred maintenance coming out of the crisis.


Aerospace - Military Seemingly unscathed by the pandemic, Military Aviation seems to be tracking to forecast expectations, but many analysts believe that the sector will be impacted as the government reassesses its financial position later this year, especially in light of the cost of the CARES act.


For Continued on pg 18 June 2020 ❘ 17 ®


the time being, neither Pratt & Whitney nor GE military engine production have been negatively affected by COVID-19. In fact, GE was recently awarded $476 Million in military contracts with nearly half of that contract spend on 48 F414 engines. The contract also addresses T700 engines for 40 UH-60M Black Hawk helicopters, eight F414 spare engines and restarts T-64 engine core production. Raytheon Technologies production of military engines, in particular P&W’s F135 (F-35 fighter and the next-generation B21 bomber) and PW4000 (KC-45A tanker), remains unaffected.


Aerospace Summary In the January forecast, our expectations were that Civil Aerospace Casting Sales would undergo a market correction and would be relatively flat, with moderate growth coming from the Military sector. Based on the current global situation, feedback from foundries, and analyst data, we have revised our 2020 forecast to reflect a major decline in civil components offset by military applications resulting in an overall 25+% decline over the last three quarters of the year. On this basis, we estimate that with this year’s Aerospace investment casting sales should come in around $3 Billion.


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