There were firm orders for 568 large civil jet engines in July, the largest number ordered in a single month so far this year. These pushed up the number of engines on firm order to the new industry high of 26,224. This figure includes a record number of single-aisle engines. July also saw a record number of new engine installs for the month of July and, so far, there have been 1,640 engine installs which is the largest number ever in the first seven months of a year.

 

There were orders for 566 engines in June, and two more than that in July. The industry might have expected a much larger July intake, especially since it was a Farnborough month. The engine companies did announce far more orders in July. They announced billions of dollars worth of engine orders but not everything went onto the order books by the end of the month; there were not many working days between the end of the air show and the end of the month so there is a lot still to come.

What was announced was a mix of orders and commitments. The engine orders will appear on the books soon but commitments for engines might take a bit of time before they are converted to firm orders. Some were from customers who had not yet even finalised their aircraft order but who signed MoUs for the engines, subject to completion of the aircraft order. Some were from customers who were still negotiating their aircraft order and who would, in time, want to sign for the engines. Some were from customers who were planning to order aircraft and these were the engines they were going to select – they would want to know that they could get engines for the aircraft production slots. And so on. Some might even have been speculative engine orders – leasing companies knowing that they can sell or fill the production slot.

The point here is that with a record number of engines already on firm order, demand for more is still strong. The number of To Be Decided engines did drop in July as some customers who had already placed their aircraft order got around to announcing their engine orders, but there are still over 1,200 aircraft on firm backlog order without engine selections.

At the end of July the number of engines on firm order reached a new high of over 26,200. There were 21,678 single-aisle engines on firm order which is a new record for the industry though it is just 58 more engines on order than at the start of this year. There were also 4,546 widebody engines on firm order, 102 more than at the start of the year. This was not a new high for the industry, it is 160 fewer widebody engines than were on order at the end of July last year, but the gain after seven months means that the long period of widebody engine order book decline has stopped.

In July there were orders for 524 single-aisle engines and 44 widebody engines. These took the total intake so far this year to 2,346 engines, roughly 500 fewer than in the same period last year. The LEAP program took orders for 1,298 engines or over three quarters of all single-aisle engines firm ordered this year. The GEnx program took orders for 278 engines or over 40% of all widebody engines ordered this year.

Suppliers to the engine industry are interested in engine orders but are really rather more interested in installs. So far this year there have been 1,640 which is a record for the first seven months of a year. In July alone there were 236 new engine installs, 100 fewer than in June, but this was a record for the month of July and was made up of 188 single-aisle engine installs (36 more than last July) and 48 widebody engine installs (18 fewer than in July last year).

So far this year there have been 1,228 single-aisle aircraft engine installs which is a record for the Jan-July period. This is 90 more engine installs than in the Jan-July 2015 period when the previous record was set. There have been 1,038 CFM installs so far this year, made up of 626 CFM56 and 412 LEAP engines. This is the largest number of CFM installs in the first seven months of a year and it represents 84% of all single-aisle engine installs so far, and over 400 more installs than all the other engine companies put together.

The record number of installs by the end of July was very much a function of the increased number of single-aisle engine installs. There have also been 412 widebody engine installs this year which is the lowest number for the Jan-July period since 2013. By the end of July last year there were 452 widebody engine installs and in Jan-July 2015 there were 490.

 

Phil Abbott.