Raytheon Technologies and General Electric reported strong commercial-aftermarket growth within their respective Pratt & Whitney and GE Aviation Services business units last quarter, lending support to the view that the aircraft maintenance sector is tracking toward a full recovery.
Pratt’s commercial services business revenues were up 23% year-over-year (YOY) and 14% sequentially, with strong showings across its current and legacy platforms, including Pratt & Whitney Canada, company executives said on a third-quarter (Q3) earnings call Oct. 25.
“We expect strong growth on the commercial aerospace side to continue,” Raytheon President and CEO Greg Hayes said. “[Revenue passenger miles] will continue to recover back to 2019 levels, and so we’re going to see strong [original-equipment] growth as Boeing and Airbus take up production rates. And we expect to see strong aftermarket growth as well, as airlines continue to add capacity and try and keep the planes they have flying.”
Pratt’s aftermarket business has been bolstered by heavy freighter usage, which is helping support demand for older platforms such as the PW4000. The continued global narrowbody recovery, particularly in large markets such as the Asia-Pacific that have lagged behind some other global regions, will help V2500 shop volume and aftermarket revenue—the company’s biggest services driver while the PW1000G fleet steadily matures—continue to climb.
“We’ve talked about the shop visits going up about 20% on a full year basis,” CFO Neil Mitchill said. “We saw about a 10% growth here in the third quarter. I think we’ve got a pretty good line of sight to the fourth quarter at this point. So, I think the 20% up year-over-year still sticks.”
Pratt also is seeing “higher content per shop visit, which again was expected as these aircraft are now flying at much greater and sustained levels than they were over the last couple of years,” he added.
Pratt also will eye spare-parts price hikes to help offset some rising costs.
“A number of our customers have contracts in place ... so some of that increase is muted, but there is a number of them that do not,” Mitchill said. You will see that drop through, and that will help to offset some of the headwinds that we’re dealing with.”
GE Aerospace saw shop visits grow 10% sequentially and “more than 30%” YOY in Q3, CEO Larry Culp said on GE’s Oct. 25 earnings call. The company’s spare parts rate—commercial spares shipped out or used in GE-provided time-and-materials shop visits expressed in millions of dollars in sales per day—continue to climb, reaching $29.4 million in Q3. The figure was a 33% jump YOY, and 20% sequentially. Pre-pandemic, the figure was around $30 million/day.
“Shop visits were up year-over-year and sequentially [and] the scope within those shop visits was more robust,” Culp said. “We saw a favorable mix with respect to our parts business as well.
“I think the operating mindset that we have is really to continue to drive shorter turnaround times, higher on-time delivery and really do all that we can to help the airlines meet what has been clearly quite robust demand on the part of the flying public,” he added.
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