Pratt & Whitney, a unit of diversified conglomerate United Technologies Corp. (UTX - Free Report) , has finalized several contracts to deliver engines exclusively to Azul and Philippine Airlines, and via the International Aero Engines (IAE) consortium to SaudiGulf Airlines and International Airlines Group.
The Azul & Philippine Contracts
Pratt & Whitney, a leading aircraft engines manufacturer, will supply exclusive power for 30 firm Embraer E-Jets E2 aircrafts under a contract proposed by Embraer SA (ERJ - Free Report) and Azul Brazilian Airlines. Azul, the third largest airline in Brazil and a favored low-cost carrier in Latin America, has witnessed remarkable growth in the past six years. The company chose Pratt & Whitney’s PurePower engines to gain considerable operational and cost benefits.
Separately, Philippine Airlines inked a Letter of Intent to use Pratt & Whitney’s PurePower engines to power its 10 Airbus A320neo aircrafts. In the process of modernizing its fleet, the 73-year old airline has chosen these engines to improve fuel efficiency and reduce operational expenses. The Letter of Intent includes a long-term maintenance service agreement.
Shareholders of IAE, a multinational aero engine consortium, include Pratt & Whitney, Pratt & Whitney Aero Engines International GmbH, Japanese Aero Engines Corporation and MTU Aero Engines.
IAE’s contract with SaudiGulf Airlines requires the former’s V2500 engine to power four A320ceo aircrafts and includes an eight-year V-ServicesSM maintenance service agreement. SaudiGulf, a new airline set to start operations in 2015, has selected IAE to develop a quality fleet with state-of-the-art technology.
Further, IAE signed a memorandum of understanding with International Airlines Group wherein it will supply V2500 engines to power 30 A320ceo aircrafts for Vueling Airlines, a subsidiary of International Airlines. A premium low-cost carrier, Vueling Airlines seeks to leverage the engines’ low carbon-emission capability and fuel efficiency to trim costs and generate ecological benefits.
In order to meet the escalating demand for its engines, United Technologies recently signed a 10-year deal valued at over $1 billion with Firth Rixson, wherein it will supply engine and system components for Pratt & Whitney and UTC Aerospace Systems – two operating segments of United Technologies.
United Technologies is planning a global-scale ramp-up in its commercial and military production, so as to capitalize on robust growth opportunities foreseen in the aerospace industry.
United Technologies currently has a Zacks Rank #2 (Buy). Other stocks that look promising include Noble Group Ltd. , sporting a Zacks Rank #1 (Strong Buy), and Hutchison Whampoa Limited , carrying a Zacks Rank #2 (Buy).