At this week’s Paris Air Show, CFM International tallied a string of stunning sales contracts for its best-selling LEAP turbofan engine. In three days, the GE Aviation and Safran joint company announced orders and commitments for more than 1,150 LEAP engines, along with long-term services agreements, for a total value of approximately $50.2 billion at list price.
It has been a remarkable eight-year run for the LEAP beginning with the amazing Paris Air Show of 2011. In fact, one could easily call 2011 the “LEAP Summer of Love,” and CFM hasn’t looked back.
While competitions between jet engine models can last for decades, the greatest pressure is at the opening bell. CFM certainly felt the strain in early 2011 with its new LEAP engine.
In the battle to power the new Airbus A320neo, the Pratt & Whitney geared turbofan (PurePower) was first out of the gate in March 2011 as the launch engine for the aircraft. Very quickly, P&W established a 500-engine sales lead over the unsold CFM LEAP turbofan.
This forced GE and Safran technical leaders to huddle and reevaluate potential LEAP engine shortfalls. To assure better fuel efficiency and improved range for the A320neo, CFM increased the LEAP fan diameter by two inches, added an extra LPT stage, and took the engine’s bypass ratio to 10:1. Now, the LEAP better competed on fuel efficiency against the P&W offering.
In early June of 2011, the improvements helped the LEAP win a sixty-engine launch order from Virgin America. At the time, CFM program leader Bill Clapper continually emphasized that once the LEAP was launched, the competitive landscape would shift to CFM’s advantage. And, boy was he right.
With the 2011 Paris Air Show two weeks away, GE and Safran prepared for a propulsion showdown on aviation’s largest stage. CFM leaders arrived at Paris-Le Bourget Airport with great confidence because they knew several longtime customers would open checkbooks to expand their aircraft fleets.
After the dust settled at the show, CFM’s order book swelled to 910 LEAP-1A turbofans for 455 A320neo jetliners, including AirAsia’s stunning order for 200 LEAP-powered A320neos. In addition, CFM sold almost 300 additional CFM56 engines for earlier-model Boeing 737s and Airbus A320s.
What on Earth happened?
“There had been a pent-up demand for the CFM product, but airlines were waiting for us to put our best foot forward,” recalled Bill Brown, a veteran GE Aviation marketing manager. “Once we introduced a final design of the LEAP engine with the larger fan, the floodgates opened. Customers were waiting on us to make that commitment.”
Better yet, the remarkable “LEAP Summer of Love” continued. The A320neo sales bonanza at Paris forced Boeing’s hand. Two months before the air show, Boeing President Jim McNerney said his team was still evaluating both all-new and upgraded 737 designs. Meanwhile, CFM lobbied hard for Boeing leadership to decide on which aircraft to develop sooner rather than later.
“We worked hard to keep the LEAP engine core as close as possible for both Airbus and Boeing,” said Clapper. “We knew the fan size for the two applications would be different, but we were in a great position by 2011 to have an excellent engine for both companies.”
By mid-July, brisk A320neo orders and strong interest in the new Airbus jetliner by American Airlines, a longstanding Boeing customer, put into motion another game-changing event for CFM. It begins when Chaker Chahrour, CFM program leader, took a surprise phone call from Boeing. “I’m asked to fly to Dallas with them to make a deal with American Airlines,” Chahrour recalled. “We (CFM) were locked in with Boeing on an engine configuration, but American needed a personal level of confidence from the engine maker that we could deliver on our fuel burn and maintenance commitments.”
After hours of technical briefings in a conference room, Chahrour joined Boeing and American Airlines leaders in a flurry of handshakes. The airline endorsed Boeing’s plans to offer an “upgraded” 737 with the LEAP engine.
Echoing the engine order spree at the Paris Air Show, the CFM56 engine’s successful operating history with American Airlines played an important role in winning confidence for the LEAP engine.
On July 20, 2011, American Airlines announced plans to order 460 single-aisle aircraft, including Airbus A320s and Boeing 737s, as well as an additional 100 “upgraded 737s” with LEAP-1B engines. Weeks later, the Boeing board of directors approves the upgraded, LEAP-powered Boeing “737 MAX” program, knowing that a critical airline customer, Southwest Airlines, was waiting in the wings.
The brisk sales for LEAP-powered Airbus and Boeing jetliners continued throughout 2011. By November, CFM had booked 2,660 LEAP engines for the Airbus A320neo, the Boeing 737 MAX, and the COMAC C919— the fastest sales rate for any new CFM jet engine.
In December, long-standing Boeing and CFM customer Southwest Airlines made it official: 150 737 MAX and fifty-eight current CFM56-7-powered 737s. It was one of the largest single CFM/737 orders ever.
While the LEAP engine booked orders at a record clip, P&W and Rolls-Royce in late 2011 radically altered the International Aero Engines consortium (P&W, Rolls-Royce, MTU, Japanese Aero Engine Corp.), the archrival engine maker to CFM on earlier-model A320s.
For decades, the IAE V2500 engine had been the airline industry’s second best-selling engine on the popular Airbus A320. Between 1985 and 2011, IAE’s V2500 turbofan engine won between 45 and 48 percent of the engine orders for A320s against the CFM56-5. However, re-engining the Boeing and Airbus jetliners without an IAE engine offering changed everything for the consortium going forward.
In October, P&W agreed to pay $1.5 billion for Rolls-Royce’s share in IAE. In addition, P&W also paid Rolls-Royce an unspecified amount for each hour flown on the V2500 fleet already in service for the next fifteen years. In other words, P&W was going it alone for single-aisle jetliners with its geared turbofan engine.
The agreement dramatically shifted the competitive landscape between the CFM56-5 and the V2500, the two engine offerings for earlier-model A320s. To the surprise of many, sales for these earlier A320 models stayed robust over the next several years as fuel prices declined. More importantly for CFM, engine orders for this aircraft model gravitated to the CFM56-5. During 2012-2017, about 900 earlier-model A320s are ordered with more than 70 percent powered by the CFM56-5.
As the decade’s end approaches, the venerable CFM56-5 engine on the A320 is being phased out as production soars for its best-selling replacement, the LEAP, for the Airbus A320neo.
While the LEAP is firmly established as one of aviation industry’s most popular jet engines, it’s easy to forget a brief time not long ago when this outcome was quite uncertain.
That’s what the Paris Air Show can do.