Business-Jet Engine Sales to Return to Peak by 2015, Pratt & Whitney Says

Pratt & Whitney Canada, the world’s biggest maker of small and medium business-jet engines, projects its market will return to peak production levels by 2015 and plans to pursue orders from makers of larger planes.

“We’re more than the average on optimism when you take the most pessimistic to the most optimistic,” John Saabas, president of Pratt & Whitney Canada, a United Technologies Corp. division, said in an interview at his offices outside Montreal. Aircraft and engines will see a return to the record levels reached in 2008 “somewhere in 2014, 2015,” he said.

Pratt & Whitney Canada’s position in the market gives it a broad view including potential competitions for new aircraft that haven’t been made public, Saabas said. Mid-sized jets will recover more slowly, while interest in so-called heavier jets exceeds both medium and light planes in the early part of the recovery, Saabas said.

“It’s a great opportunity for us with all those yet-to-be announced competitions,” Saabas said, adding that Pratt’s new PW800 engine is meeting targets during testing at Pratt Canada’s facilities in Longueuil, Quebec. “We see a lot of strength in our traditional markets,” he said.

Business-jet makers including Bombardier Inc. and General Dynamics Corp.’s Gulfstream are considering a new larger model, while Textron Inc.’s Cessna has said it may reconsider the cancellation of a plane that was to feature the PW800 series. Rolls-Royce Group Plc of London is the biggest maker of engines for large business jets, followed by Fairfield, Connecticut- based General Electric Co.

Engine Testing

Pratt & Whitney, like GE and Rolls Royce, also makes large commercial and military engines. The small-engine unit in Canada provided about $2.9 billion of East Hartford, Connecticut-based Pratt & Whitney’s $12.58 billion in sales last year.

Pratt Canada’s PW800 engine, designed to take a share in the large business-jet market, will be ready by the time airplane makers decide to debut new models in three to five years, Saabas said.

That’s because the core, or hot-section, of the engine is being tested as part of a larger engine model used to power Mitsubishi Heavy Industries Ltd.’s regional jet and Bombardier’s new CSeries airplane. The PW800 had been set to debut in 2014 on Cessna’s Citation Columbus model, which was canceled in April 2009 amid declining demand.

“There are going to be regional applications before the business world, so the core will be developed,” Saabas said.

Market Bottom

Pratt Canada, also the world’s biggest turboprop maker and a manufacturer of helicopter engines, said deliveries declined to 3,144 last year from a peak of about 4,000 engines in 2008. Executives have predicted fewer Pratt Canada deliveries this year as planemakers including Cessna and Bombardier forecast a market bottom.

While the Canadian division has eliminated jobs with the drop in production, Saabas said he hasn’t reduced development funding. The company is also working on better-performing turboprop engines, he said. Pratt Canada has certified five new engines each year over a 10-year period, the company said May 12. Saabas wouldn’t say how much the unit is spending.

Cessna, builder of the most business jets each year, doesn’t typically see demand rebound following economic recessions until about eight quarters after corporate profits return.

United Technologies, with units that also include Sikorsky Helicopters, fire and security systems, Hamilton Sundstrand aerospace systems, Carrier air conditioners and Otis elevators, had $52.9 billion in sales last year.

United Technologies rose $1.70, or 2.5 percent, to $68.60 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have declined 1.2 percent this year.

To contact the reporters on this story: Rachel Layne in Montreal at rlayne@bloomberg.net; Susanna Ray in Montreal at sray7@bloomberg.net.

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