Jan. 9 (Bloomberg) -- United Technologies Corp.’s Pratt & Whitney unit won a pact to build jet engines for redesigned Embraer SA jets currently powered by General Electric Co.
The Brazilian aircraft will be the fifth to carry the new geared turbofan model from Pratt, whose bid trumped proposals from Rolls-Royce Holdings Plc as well as GE. Financial terms of the agreement were confidential, the company said.
Embraer decided in 2011 to overhaul the planes with new wings and engines rather than build a larger competitor for narrow-body aircraft made by Boeing Co. and Airbus SAS. More than 900 of Embraer’s E-series models are in use now, and the redesigned planes are scheduled for delivery in 2018.
“This new generation will give a lot of value to clients,” Paulo Cesar Silva, Embraer’s commercial aviation chief, said in a telephone interview. “We are really doing a modification beyond the introduction of the new motor, which will make the jets more efficient.”
Pratt’s geared turbofan, which the company has said reduces fuel burn by as much as 15 percent, curbs noise by using a gear to slow the engine’s outer fan. Combined with wing improvements, full fly-by-wire flight controls and other alterations, it will provide “double-digit” improvements in efficiency and maintenance costs for the revamped jets, Embraer said.
The planemaker is still evaluating whether it will redesign all four of its E-jet models, whose current versions carry from 70 to 120 passengers, Silva said. Upgraded versions of Embraer’s E-195 planes, the largest of that group, may be stretched to seat as many as 132 people, the Sao Jose dos Campos-based company has said.
Kathleen Padgett, a spokeswoman for Pratt & Whitney, and Deborah Case, a spokeswoman for GE Aviation, referred questions to Embraer.
The company climbed 2.4 percent to 14.10 reais in Sao Paulo. United Technologies advanced 1.2 percent to $84.55 in New York, while Fairfield, Connecticut-based GE rose 0.2 percent to $20.95.
Pratt & Whitney’s win follows United Technologies Chief Executive Officer Louis Chenevert’s overhaul of the company to intensify its focus on aerospace. Hartford, Connecticut-based United Technologies paid $16.5 billion last year to buy Goodrich Corp., the biggest maker of landing gear, in the industry’s largest acquisition.
“It’s strategically important,” Nick Heymann, a New York-based analyst at William Blair & Co. who has an outperform rating on United Technologies’ stock, said in a telephone interview. “This increases the universe of opportunities for engine sales on the highest-cycle part of the commercial aircraft market.”
Regional jets’ frequent take-offs and landings mean more high-margin sales of spare parts and maintenance work for engine makers such as Pratt & Whitney, Heymann said.
The jet-engine business garnered about 3,000 orders for the geared turbofan through the end of 2012, according to a Dec. 21 statement. The two new engines Pratt & Whitney will produce for Embraer will provide from 15,000 pounds to 22,000 pounds of thrust, the planemaker said yesterday.
Pratt & Whitney is already offering similarly powerful geared turbofan engines for other planes. The engines developed for Mitsubishi’s MRJ regional jet produce 13,000 to 17,000 pounds of thrust, and those made for Bombardier’s CSeries narrow-body are rated at 21,000 to 24,000 pounds of thrust.
Since unveiling the geared turbofan in 2008, Pratt & Whitney has won agreements to power the new regional jet from Mitsubishi Aircraft Corp. and narrow-body jets from Airbus SAS, Bombardier Inc. and Russian planemaker Irkut Corp.
Both Mitsubishi’s and Bombardier’s new planes have suffered delays. Mitsubishi’s MRJ model won’t fly for the first time until the fourth quarter as the planemaker confirms fabrication processes and completes technical studies, while Bombardier delayed the CSeries narrow-body’s maiden flight until at least June after unspecified issues with suppliers.
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