P&W & Rolls form new engine JV, restructure IAE partnership

Engine giants Pratt & Whitney and Rolls-Royce are forming a new joint venture to develop engines for next-generation mid-size aircraft in a deal that restructures their long-standing International Aero Engines partnership.

Under the multi-faceted deal, P&W is buying Rolls’ share of the two engine companies’ IAE joint venture company for $1.5 billion, it was announced late Wednesday.

IAE produces the V2500 engine for Airbus A320 family aircraft. (ATW Daily News, June 20) The deal is subject to regulatory approval.

Hartford, Connecticut-based P&W said it intends to discuss a possible offer of a portion of the Rolls’-purchased shares with its IAE partners MTU Aero Engines and Japanese Aero Engines Corp. In addition, Rolls will receive an agreed payment for each hour flown by the current installed fleet of V2500-powered aircraft for 15 years from completion of the transaction, P&W said.

IAE was formed almost 30 years ago and has some 4,500 V2500 engines in service and approximately 2,000 on order.

The new 50:50 joint venture between P&W and Rolls will develop engines for next-generation mid-size aircraft in the 120 – 230 seat range. The companies predict this to be a market for 20,000 new aircraft -- or nearly 45,000 engines -- over the next 20 years.

The partnership will focus on high-bypass ratio geared turbofan technology and the companies will collaborate on future studies for next generation propulsion systems, including advanced geared engines, open rotor technology and other advanced configurations.

It was also announced that Rolls will make a “modest financial investment” in the P&W’s PurePower PW1100G-JM Geared Turbofan engine for the Airbus A320 New Engine Option (neo) program.