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SPEECH

Steve Finger, Aero Club Speech

WASHINGTON, D.C., Thursday, September 25, 2008

Pratt & Whitney’s PurePower® family of engines offers fuel-saving Geared Turbofan (TM) technology as a big part of the solution for struggling commercial airlines, President Steve Finger said in a speech at the Aero Club in Washington, D.C.

Transcript

Thank you, Susan. I’m delighted to be here this afternoon, and especially to speak to this distinguished group. I’m going to talk about our Geared Turbofan engine. And I’m going to talk about some of the challenges facing commercial aviation. But before that, I thought I would spend just a minute speaking about Pratt & Whitney – updating you on Pratt & Whitney.

Pratt & Whitney is about a $13 billion company. We are a leader in military jet engine technology. In fact, we’re the only producer of fifth-generation fighter aircraft engines. We are a leader in business jet engines – everything from helping enable the very light jet industry to the leader in fuel-efficient turboprops. We’re the only engine company that offers a full range of products from 25- and 50-megawatt, land-based power units to liquid rocket engines for the Space Shuttle, the Atlas program, the Delta program and for NASA’s Vision for Space Exploration future programs.

We make engines from a thousand pounds of thrust to almost 100,000 pounds of thrust. We are an OEM – original equipment manufacturer; we are an MRO – a maintenance, repair and overhaul entity. In fact, the year before last we coined the term OEMRO, and that’s because we uniquely bring the MRO flexibility to the OEM business and the OEM capability to the MRO business. And we do that for our parts and our engines and we do that for parts and engines of our competitors.

Our biggest segment of our business is the commercial engine aviation business and through our partnership with Rolls-Royce, MTU and the Japanese Aero Engine companies, we have what’s called IAE – International Aero Engines. We produce the most fuel-efficient engine today – the V2500 – in the narrowbody sector. And through our partnership with General Electric, called the Engine Alliance, we produce the most fuel-efficient engine today – the GP7000 – for the widebody segment of the market. So that’s a little bit about Pratt & Whitney. Now let’s talk about some of the challenges facing the commercial aviation industry today.

Starting with economic challenges:

  • • Oil selling for over $100 a barrel.
  • • A credit crunch affecting our nation and the world, making it difficult to finance new aircraft and putting a question mark on what the passenger traffic will be – both for vacation and leisure and for business travel.
  • • Environmental challenges – continued restrictions on noise and carbon emissions around the world, leading to restrictions and higher landing fees and operator cost.
  • • Noise challenges, in that it is still tough to build or expand an airport so the ability to expand places to go is tougher.
  • • And at the same time, the air traffic congestion in today’s aircraft system, whether it’s in the United States or in Europe and other places, tends to make our flying less efficient and more challenging.

Other than that, everything’s pretty good, right? [Laughter from audience]

Listen, I’ve got to tell you, I really compliment the airline industry. Watching them and working with them as a partner over the last few years and seeing how they have responded to these challenges is absolutely amazing. Their ability to cut costs and continue to cut costs, and ensure safety at the same time they’re doing it, is very impressive. Their ability, frankly, to deal with it from a capacity standpoint, to raise prices, to collect additional fees to recover their original costs in prices – whether it’s fuel costs or charges for baggage; whether it’s ensuring that the load factors are high enough, you have to give them credit. They are doing an exceptional job, and at the same time they’re dealing with environmental issues in a responsible way. So I guess I’ll start my remarks by saying that the industry that we support, the airline industry, is doing an amazing job given the difficult conditions they have.

But more needs to be done. And certainly we from the engine community believe we’re a key part of that. I actually think there are four “knobs” – there are four dials if you will – that are going to have to work in harmony if we’re going to help our airline community to grow and expand.

First – we need more direct aircraft routes. That is what we put in place with a lot of rules and regulations, but also with the next-generation air traffic system. Pratt & Whitney strongly supports, both through AIA and individually, funding for the next-generation air traffic system, as we need to increase the efficiency and reduce congestion and emissions and fuel consumption. In fact, I think generally the numbers I see are that it’s possible to get anywhere from 10 to 20 to 25 percent potential improvement – reduction in fuel consumption, reduction in emissions, etc. – through better aircraft management and air traffic and more direct routes. That’s a key part of it.

The second – alternate fuels. I believe a key part of the future will be alternate fuels. I put them into two categories – synthetic fuels, which is conversion of gas and coal to liquid fuel through a Fischer-Tropsch or other process. One is synthetic fuels – it has an issue of carbon emissions while during the conversion process and the capacity to do the conversion, but I believe we’ll work through those, and it is clearly in my mind the nearest-term potential solution. In fact, many Pratt & Whitney engines are already qualified to fly on blends of that synthetic fuel.

The other alternative fuel is bio-fuel. It will have to happen at some point, but it will require a fuel that is compatible with today’s aircraft and engine systems and it will require a fuel that does not attack the food supplies. And I think it is going to have to be a coalescence and will take longer to get that part of it, so I would see alternative fuels – first synthetic, second bio-fuels. We are a part of the community that is in the process of certifying and helping foster both of these types of alternate fuels.

Third – lightweight, more efficient aircraft. We have seen over the years that this has been a hallmark of improvement in fuel efficiency, in passenger comfort and in capability for airlines. We’re seeing today that there are two brand new entries that we happen to power with our Geared Turbofan, the Mitsubishi Regional Jet and the Bombardier CSeries, that are already taking the next step with fuel-efficient, excellent aircraft in terms of both efficiency and emissions as we look at the next generation.

And then, finally, I come to engines – lighter weight, more efficient, more fuel-efficient engines. And that will be the bulk of my remarks now. Why are engines such an important part?

You know, if you look back in history, virtually no significant step forward in aviation has occurred without a major engine step forward. I’ll give you a few examples, going back to the starting of Pratt & Whitney in 1925. Frederick Rentschler started with an air-cooled radial engine, which dramatically increased the horsepower-to-weight capability and found its first application on a Navy fighter aircraft, and the rest as they say is history with Pratt & Whitney. But again, radial air-cooled engines started the change. I go back to 1952, the first Collier Award given to an engine company was to Pratt & Whitney for the J57, the first large-scale turbojet engine. I go back to the 1970s, when I started my career with Pratt & Whitney – the F100 engine for the F-15 and the F-16. This was the first engine that gave fighter aircraft the ability to have a thrust-to-weight ratio greater than one as an aircraft, and it defined a generation of air superiority for the United States. And then, keeping on the military side, you go to today’s F119 and F135 engines for the F-22 and the F-35 Joint Strike Fighter. The first fifth-generation fighter aircraft engines, thrust-vectoring, stealth, and supercruise which are turning air superiority into air dominance as we go forward in this country.

Equally, on the commercial side – I think my friends in this room would agree that the JT8D, the first turbofan engine, launched with the Boeing 727, the 737, the DC-9, really launched the commercial aviation industry to become widespread as we know it today. And then the JT9D on the 747, the first widebody aircraft, for the first true, high bypass ratio engine. In fact, from the 1950s to the early 1990s, the engine improvements alone accounted for a 50 percent reduction, or 50 percent improvement in fuel economy, 50 percent reduction in fuel burn, and over a 70 percent reduction in the noise signature of commercial aviation. Very impressive. All of that on the commercial aviation side was due to higher and higher bypass ratios.

I’ll stop and have a quick physics discussion. Bypass ratio – how much air goes through the outside of the engine rather than through the core of the engine. We make thrust in engines by taking airflow and increasing its velocity. So you can make more thrust with more airflow or by a greater increase in velocity of the same amount of airflow, right? It turns out that it’s much more efficient to make thrust with more airflow and have a lesser velocity increase. That’s why we have seen engines get bigger and bigger over the years in diameter. The higher airflow/less velocity is what gives much better fuel burn – and also, by the way, gives lower and lower noise. I just said a minute ago that from 1960 to 1990 – bypass ratio increase and other improvements resulted in a 50 percent improvement in fuel burn.

But it’s interesting, since the early 1990s the annual improvement has been less and less, and it’s because the bypass ratio has started to become constrained. It’s because fans have gotten about as big as they can get with the current architecture, and the current architecture is a fan attached to a turbine that drives it. As the fan gets bigger, it has to turn slower and slower, but the turbine that drives it wants to turn faster and faster. So the only way the turbine can power the fan is to add more and more stages to it. That adds weight, that weight offsets the benefit of the bigger fan, and we basically reach the point of diminishing return. So only with incremental improvements in materials and component performance can we extend it. So that’s kind of the state we’re in now with an incremental improvement.

Pratt & Whitney’s now introducing with our Geared Turbofan technology, a step-change improvement. We saw this phenomenon in the late ’80s and early 1990s, and we started working on the Geared Turbofan engine. What this does is it puts a reduction gear between the fan and the low-pressure turbine so the fan can turn much, much slower and the turbine can turn much, much faster. And we actually get to eliminate turbine stages – which happen to be the most expensive and some of the least reliable parts of the engine – and we get to turn the fan at its optimum speed so it can get bigger and bigger, and all of a sudden the equation is changed! We can up the bypass ratio and we can start to see the kinds of improvements that we have seen historically beginning with a step change, all because we’re putting the gear in place.

Interestingly, we’re the only company that’s been working this technology. We’ve worked it with our airline partners over the last several years and we’ve had them come and help us define the engine configuration. Today we have 37 granted patents and over 200 pending patents. We have tested all this technology, actually a family of technologies. We have tested three versions of this engine starting in 1992 and culminating today, with test engines from 11,000 pounds of thrust to 40,000 pounds of thrust. We have our 30,000-pound thrust version which we have ground testing. We have flight tested on our own 747 test bed, and it’s now mounted on Airbus’ A340 to begin flight testing on that aircraft.

During this time period we also looked at different configurations. We looked at how far we could take the existing conventional turbofan architecture, and we looked at so-called “open rotors.” Interestingly enough, we know a lot about open rotors. We have made 40,000 open rotor aircraft – we call them turboprop engines. An open rotor for the size of a 737 or an A320 aircraft, to provide that level of thrust, would be six feet bigger in diameter than the distance from ceiling to the floor of this room! So you can imagine an open rotor has both noise issues and it has installation issues. And we believe an open rotor makes a lot of sense for smaller aircraft, about 90 passengers and below, and for shorter distances because open rotors are optimal at lower air speeds. So for shorter distances, smaller aircraft, we believe the open-rotor turboprop is the right solution, and we continue to work on more advanced versions of that.

We also look at what existing technology can do with the current architecture. And we don’t pretend that we have the best in all technologies, but we believe we have as good or better in most technologies across the engine, including the most efficient and capable core. And we will take those and we will incorporate them, and no matter what you have with that, when you add the gear to it, we get a 6 percent fuel burn improvement and a double-digit noise improvement.

The other interesting thing is that we observed that putting the gear in the system gives us what I call more “trade space.” We now have the ability to greatly increase the flexibility in how we configure the engine of the future, so that we take this initial 6 percent step change because of the gear, and we’re able to expand that differential benefit as we go forward.

At the Farnborough Airshow this year, we introduced a new family of engines. We call it the PurePower family of engines. The PurePower PW1000G is our first member of this family of engines, with the “G” for the Geared Turbofan. It’s Pure because it’s quiet – 20 dB below Stage 4 noise levels. In fact, when you look at the audible noise footprint of a typical airplane today as it leaves an airport, with the Geared Turbofan the size of that audible footprint is reduced by 75 percent. Meaning that, in addition to the fuel-burn benefit, which is about 15 percent because of the engine itself, there is an additional benefit because pilots can avoid noise abatement routes required at many airports. So we’ll add that additional benefit to the basic fuel efficiency and fuel-burn benefit. Along with a 15 percent reduction in fuel burn comes a 15 percent reduction in CO2 emissions, because they go hand-in-hand. And because we’ve incorporated other technology into this engine, there’s over a 50 percent reduction in NOx emissions. By our calculations, airlines buying the Mitsubishi Regional Jet or the Bombardier CSeries with our Geared Turbofan engine will save between $1 million and $2 million dollars per year, per aircraft, in a combination of lower fuel costs, maintenance costs and noise and other emissions fees.

Here’s the most important thing about this engine. It’s real. It isn’t just on paper. You don’t have to wait for it in the future. You don’t have to hope that it happens somewhere in the future. It is real today. We have flown it on our own 747 flying testbed. We flew it throughout the flight envelope. We took over a thousand test data points with its full thrust range up to 30,000 pounds, and full functionality including air starts. All were extremely successful. I just came back from Toulouse, France, yesterday. I was there to see this same engine mounted on the Airbus A340. We expect to do the initial ground-run of the engine tomorrow and hopefully fly as early as next week. So we, with our Airbus partners, will be evaluating the characteristics of this engine installed on the A340 as a flight demonstration over the coming weeks.

This engine is real. It is available today on the Mitsubishi Regional Jet and the Bombardier CSeries. In fact, two of the most respected airlines in the world – ANA and Lufthansa – have already placed their orders for these new aircraft. The block fuel benefit for these two aircraft is 20 percent each better than other aircraft flying today and up to 40 percent better than older aircraft in the same size range and class. And I’ll tell you, most of that benefit comes from the Geared Turbofan engine. This engine is real. It’s available in these aircraft and it’s available in 2013.

So, in summary – you can tell I’m bursting with pride over our new product. [Laughter from audience] We are proud to be part of the history of aviation. We are delighted to work with our airline partners as they weather these tough times. Certainly throughout my career and the study of history that I have done, engines have to be a key part of leading change in the aviation industry. Whether it’s in business jet aircraft engines military engines or commercial engines, we’re working very hard to be a leader, to be the leader in this historic change. And our game-changer today is that the Geared Turbofan is, we believe, the step change that airlines are looking for as they see tough times ahead. As we like to say, with the PW1000G PurePower engine, airlines can have it all – better emissions, better fuel burn, lower maintenance cost – and they can have it all without tradeoffs. You can have better noise control – it comes with it – and it’s helping both the environmental impact and the economic viability of airlines. So thank you very much. I appreciate the opportunity to make these comments, and I’d be glad to take questions.

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