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RTX Arm's GTF Engine Selected by Icelandair for 35 Aircraft
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RTX Corporation (RTX - Free Report) recently announced that its Pratt & Whitney unit has been selected by Icelandair to supply GTF engines. The engines will power up to 35 new Airbus A320neo family aircraft, which includes a mix of leased and purchased A321XLR and A321LR aircraft.
Icelandair has also signed an EngineWise agreement with RTX for the long-term maintenance, repair and overhaul of its GTF engines.
Significance of GTF Engines
Pratt & Whitney’s GTF engine is the only geared propulsion system delivering industry-leading fuel efficiency and sustainability benefits. It delivers superior capability to the global fleet of single-aisle aircraft like the Airbus A320neo, Airbus A220 and Embraer E-Jets E2.
The GTF engines have the capacity to reduce fuel consumption and carbon emissions by 25% per seat compared with the engines they will replace. It also offers a 75% smaller noise footprint.
The GTF engines have powered 1,700 aircraft with more than 70 operators, which reflects the solid demand that this engine enjoys across the commercial aircraft engine market.
Growth Opportunities for RTX
The recovering economy after the pandemic has led to fleet modernization and expansion plans of airlines. This, along with increased air traffic, has been driving the growth of the commercial aircraft engines market globally in recent times. Expecting similar improving trends to continue in the near term, the Mordor Intelligence firm projects the commercial aircraft engines market to record a CAGR of 13.02% in the 2024-2029 period.
This should benefit RTX’s Pratt & Whitney, which enjoys an extensive portfolio of engines containing the GTF, V2500, GP7200 and PW2000, along with a few more, thereby boasting strong demand in the commercial aircraft engine market.
In recent achievements, in February 2024, Pratt & Whitney secured multiple orders from around the world. Vietjet, JetSMART and Cebu Pacific Air selected the GTF engines for their A320neo family of aircraft. In the same month, the company launched its Singapore-based engine center, Eagle Services Asia, which will grow its GTF capacity by two-thirds this year.
Such developments, along with the recent order win, should boost RTX’s growth opportunities in the commercial aircraft engines market.
Peer Moves
Apart from RTX, aerospace players that are likely to benefit from the growth opportunities offered by the commercial aircraft engine market are as follows:
Safran (SAFRY - Free Report) : Safran has technological expertise in the production of engines for both airplanes and helicopters. The company produces LEAP turbofan engines in partnership with CFM International, which reduces carbon dioxide emissions by 15%. The LEAP powers new-generation single-aisle commercial jets like the Airbus A320neo, Boeing 737 MAX and COMAC C919.
SAFRY has a long-term (three-to five-years) earnings growth rate of 30.2%. The Zacks Consensus Estimate for 2024 sales suggests growth of 42% from the prior-year figure.
Rolls-Royce (RYCEY - Free Report) : Its Trent family of engines have a flying time of more than 180 million hours. In 2023, 73% of the civil aerospace segment’s revenues came from large engines. On Feb 21, 2024, Rolls-Royce won an order for Trent 7000 and Trent XWB-97 engines from STARLUX Airlines.
The Zacks Consensus Estimate for RYCEY’s 2024 sales suggests growth of 17.2% from the prior-year’s figure. The consensus mark for 2024 earnings implies an improvement of 5.9% from 2023.
MTU Aero Engines (MTUAY - Free Report) : MTU partners with multiple commercial engine programs for all aircraft size classes operating on short- to medium- to long-haul routes. The commercial engine portfolio includes the GTF, GE9X, V2500, CF9 and many more. In November 2023, MTU Maintenance signed a five-year LEAP-1A MRO contract with Sri Lankan Airlines.
The Zacks Consensus Estimate for MTU’s 2024 sales suggests growth of 33.9% from the prior-year figure. The consensus mark for 2024 earnings implies an improvement of 7.5% from 2023.
Price Performance
In the past six months, shares of RTX have gained 8.1% against the industry’s 4% decline.
Image: Bigstock
RTX Arm's GTF Engine Selected by Icelandair for 35 Aircraft
RTX Corporation (RTX - Free Report) recently announced that its Pratt & Whitney unit has been selected by Icelandair to supply GTF engines. The engines will power up to 35 new Airbus A320neo family aircraft, which includes a mix of leased and purchased A321XLR and A321LR aircraft.
Icelandair has also signed an EngineWise agreement with RTX for the long-term maintenance, repair and overhaul of its GTF engines.
Significance of GTF Engines
Pratt & Whitney’s GTF engine is the only geared propulsion system delivering industry-leading fuel efficiency and sustainability benefits. It delivers superior capability to the global fleet of single-aisle aircraft like the Airbus A320neo, Airbus A220 and Embraer E-Jets E2.
The GTF engines have the capacity to reduce fuel consumption and carbon emissions by 25% per seat compared with the engines they will replace. It also offers a 75% smaller noise footprint.
The GTF engines have powered 1,700 aircraft with more than 70 operators, which reflects the solid demand that this engine enjoys across the commercial aircraft engine market.
Growth Opportunities for RTX
The recovering economy after the pandemic has led to fleet modernization and expansion plans of airlines. This, along with increased air traffic, has been driving the growth of the commercial aircraft engines market globally in recent times. Expecting similar improving trends to continue in the near term, the Mordor Intelligence firm projects the commercial aircraft engines market to record a CAGR of 13.02% in the 2024-2029 period.
This should benefit RTX’s Pratt & Whitney, which enjoys an extensive portfolio of engines containing the GTF, V2500, GP7200 and PW2000, along with a few more, thereby boasting strong demand in the commercial aircraft engine market.
In recent achievements, in February 2024, Pratt & Whitney secured multiple orders from around the world. Vietjet, JetSMART and Cebu Pacific Air selected the GTF engines for their A320neo family of aircraft. In the same month, the company launched its Singapore-based engine center, Eagle Services Asia, which will grow its GTF capacity by two-thirds this year.
Such developments, along with the recent order win, should boost RTX’s growth opportunities in the commercial aircraft engines market.
Peer Moves
Apart from RTX, aerospace players that are likely to benefit from the growth opportunities offered by the commercial aircraft engine market are as follows:
Safran (SAFRY - Free Report) : Safran has technological expertise in the production of engines for both airplanes and helicopters. The company produces LEAP turbofan engines in partnership with CFM International, which reduces carbon dioxide emissions by 15%. The LEAP powers new-generation single-aisle commercial jets like the Airbus A320neo, Boeing 737 MAX and COMAC C919.
SAFRY has a long-term (three-to five-years) earnings growth rate of 30.2%. The Zacks Consensus Estimate for 2024 sales suggests growth of 42% from the prior-year figure.
Rolls-Royce (RYCEY - Free Report) : Its Trent family of engines have a flying time of more than 180 million hours. In 2023, 73% of the civil aerospace segment’s revenues came from large engines. On Feb 21, 2024, Rolls-Royce won an order for Trent 7000 and Trent XWB-97 engines from STARLUX Airlines.
The Zacks Consensus Estimate for RYCEY’s 2024 sales suggests growth of 17.2% from the prior-year’s figure. The consensus mark for 2024 earnings implies an improvement of 5.9% from 2023.
MTU Aero Engines (MTUAY - Free Report) : MTU partners with multiple commercial engine programs for all aircraft size classes operating on short- to medium- to long-haul routes. The commercial engine portfolio includes the GTF, GE9X, V2500, CF9 and many more. In November 2023, MTU Maintenance signed a five-year LEAP-1A MRO contract with Sri Lankan Airlines.
The Zacks Consensus Estimate for MTU’s 2024 sales suggests growth of 33.9% from the prior-year figure. The consensus mark for 2024 earnings implies an improvement of 7.5% from 2023.
Price Performance
In the past six months, shares of RTX have gained 8.1% against the industry’s 4% decline.
Image Source: Zacks Investment Research
Zacks Rank
RTX currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.