MTU Eyes Slot on World’s Biggest Jet Engine as Boeing Plots 777X

MTU Aero Engines Holding AG (MTX) is in talks with General Electric Co. (GE) for a new engine to power Boeing Co. (BA)’s 777X under consideration by the U.S. aircraft maker.

A partnering agreement has not been signed, though talks are progressing, MTU Chief Executive Officer Egon Behle said in an interview at the Berlin air show today. If finalized, the work share may match the 7 percent MTU has on GE’s GEnx engine, powering the Boeing 787 and 747-8, Behle said.

Boeing is in the process of defining its eventual replacement to the 777-300ER that’s needed to do battle against the Airbus A350-1000. Rolls-Royce Group Plc (RRL) and Pratt & Whitney also are studying engine offerings for the Boeing wide-body, which is among Boeing’s bestselling planes and is powered by the world’s largest jet engine.

“When we look at who is potentially the engine maker to be most successful with Boeing, then I see a lot of arguments in favor of GE,” Behle said.

MTU has a share of as much as 18 percent on Pratt & Whitney’s geared turbofan. Behle said the nominal entry into service at around the end of the decade may not match the timeline needed to evolve the geared turbofan from the current single-aisle standard to a wide-body engine.

Photographer: Guenter Schiffmann/Bloomberg

An employee mounts parts on the high pressure compressor of an EJ200 engine, manufactured by MTU Aero Engines Holding AG for use on an Eurofighter GmbH aircraft, at the MTU factory in Munich. Close

An employee mounts parts on the high pressure compressor of an EJ200 engine,... Read More

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Photographer: Guenter Schiffmann/Bloomberg

An employee mounts parts on the high pressure compressor of an EJ200 engine, manufactured by MTU Aero Engines Holding AG for use on an Eurofighter GmbH aircraft, at the MTU factory in Munich.

Behle also is reluctant to take on more geared turbofan work at a point when three engines are already in development for the Bombardier Inc. (BBD/B)’s CSeries, the Airbus SAS A320neo, and the Mitsubishi Regional Jet. Many of those efforts are starting to transition from development to production.

Military Decline

Programs already on the books give confidence the company will make its 6 billion euro ($7.7 billion) sales target in 2020, Behle said. Commercial engine sales and servicing powerplants will dominate revenue.

Even as commercial sales are growing, MTU faces a future in which its military business, once the cornerstone of the company, is withering on weak demand from the German government. By 2020, only 8 percent of sales will be from military aircraft engine sales, down from 15 percent today and about 80 percent in the 1980s, Behle said.

No new programs are on the horizon, he said. MTU is keeping an eye on a potential need to power a new generation of unmanned aircraft, although current engine needs are centered more around existing products than new powerplants. If that should change, Behle said MTU would try to participate in a future program.

Even so, an unmanned aircraft engine program would not have the scale to make up for sales of EJ200 engines that power the Eurofighter Typhoon and are the backbone of the Munich-based engine maker’s military powerplant revenue.

To contact the reporter on this story: Robert Wall in London at rwall6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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