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Honeywell International Inc
General Dynamics Corp
United Technologies Corp
Honeywell International Inc. (HON) plans to boost the power of its largest jet engine by 20 percent to meet demand for business aircraft with enough range to reach high-growth emerging markets like Brazil from the U.S.
New parts able to handle higher temperatures and pressure would produce greater thrust from within the same engine frame as the HTF7000, said Robert Wilson, president of Honeywell’s Business & General Aviation unit. Also under study is a bigger engine variant generating 60 percent more thrust, he said.
That would help extend the range of jets in the mid-sized to large class by as much as 50 percent to 4,500 nautical miles (8,300 kilometers), enough to reach Rio de Janeiro from New York, Wilson said. General Dynamics Corp. (GD)’s Gulfstream G280 and Bombardier Inc. (BBD/B)’s Challenger 300 both use the HTF7000.
“There is still a pattern of taking airplanes a long distance to drive business growth,” Wilson said in an interview at his office in Phoenix. “They want to go faster. They want to go farther and they want to have fewer stops.”
Jet operators are being drawn to fast-expanding economies in emerging markets, Wilson said. Brazil, Russia, India and China are forecast to grow by a combined 6.3 percent in 2012, according to data compiled by Bloomberg. That beats the 2.2 percent U.S. rate and the euro area’s 0.4 percent contraction.
With more thrust, owners of jets in the mid-size to large category, which includes the Challenger 300, could fly farther without stepping up to a model such as Bombardier’s Global 8000, in a class the planemaker calls “super-large.”
“It’s a pretty good bet four or five years out there’s going to be more people making 4,000- to 4,500-nautical mile airplanes that will require higher thrust,” Wilson said. “There are airplanes that can do that today, but they’re very big.”
New entries in the mid-sized to large class include the Citation Longitude unveiled in May by Textron Inc. (TXT)’s Cessna, which will use Safran SA (SAF) engines upon entering service in 2017. Honeywell’s chief rival is United Technologies Corp. (UTX)’s Pratt & Whitney Canada unit, which provides engines for models such as Dassault Systemes SA (DSY)’s Falcon 2000LX.
“Corporations replacing older jets have been a key demand driver recently, especially in the U.S.,” Joseph Nadol, a JPMorgan Chase & Co. analyst in New York, wrote in a July 9 note. He predicted 2012 business-jet deliveries would rise 5 percent to 720 after a three-year decline of almost 40 percent.
Honeywell’s engine business is part of the Morris Township, New Jersey-based company’s aerospace unit, which accounted for 31 percent of last year’s $36.5 billion in total revenue (HON). The stock’s 6.2 percent advance this year through yesterday trailed the 8.1 percent gain for the Standard & Poor’s 500 Index.
Design work is now under way on new parts to take the maximum thrust from the HTF7000 to 9,000 pounds from the current 7,500 pounds, Wilson said. The thrust upgrade will take 24 to 30 months, he said.
Honeywell is also looking at scaling the engine up by 10 percent to produce 12,000 pounds of thrust, he said. In a scale- up, suppliers would increase the size of all components by 10 percent, creating a more-powerful engine while preserving the HTF7000’s reliability and maintenance traits, Wilson said. A scale-up of the engine would take 36 to 40 months, he said.
The market for smaller business planes continues to struggle because of a glut of aircraft for sale that was created after the market collapsed in the 2008 financial crisis, Wilson said.
About 13 percent of small aircraft inventory is on the block. While that is down from a peak of 17 percent, reaching a normal level of about 10 percent may take several years, he said.
“It’s not going to happen overnight where we see the middle to low end of the market really start to pick up where it was in 2007 and 2008,” Wilson said. “But it’s heading in the right direction.”
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