Climate Change Crystal Ball time

victoria@aviationnews-online.com
By victoria@aviationnews-online.com May 10, 2019 12:06

Climate Change Crystal Ball time

Cast your mind back some 15 years, Pratt & Whitney and Rolls-Royce had developed new engines primarily for use with the C Series (A220), which the market assumed would be produced under IAE and the engine variants that came after would be an option on wing for new A320 and 737NG deliveries. Boeing thought the same, it was logical. Then John Leahy grabbed hold of the idea and decided to wrong foot Bombardier and all of the other manufacturers by developing a new lighter aircraft to go with the new engine given that a major step change in aircraft design was still some 20-30 years away. The A320neo was launched and Boeing had to scramble a fast answer, which resulted in the 737MAX (that is another story). But before Leahy changed the game, the perception was that for the next three or four years, new engines would be mounted onto existing airframes, but manufacturers went for the fleet renewal button.

Fast forward to the present and the industry is still some five or ten years away from a new breed of efficient engines from Rolls-Royce and General Electric, with the 787, A350 and MAX aircraft in the air.  This time around the offering will likely be for new engines going onto the same airframes to answer the growing political calls for further heavy reductions in Nitrogen Oxide (NOx) and other emissions. If this does transpire, it should be a wonderful time for engine leasing and all the major lessors will have to have a dedicated engine leasing department or a good relationship with an engine lessor at least. Gearing up for this will need to start now though as a fair few very large aircraft lessors have no ownership relations with an engine lessor. It is worth a thought as airlines will need to cut the emissions but will not want to buy another round of new aircraft when the existing next generation fleet is still so very young. Indeed, all airlines should resist it for the sake of sanity as we are only 20 years away from a serious generational step change in aircraft design. So engine leasing is the key for the new breed of engines in development. That gives us some questions: Do all lessors need to have an engine leasing arm to handle the clamour to change engines on wing? Will Rolls-Royce and RR&PF be able to handle the possible demand on their own? Will engine lessors – the current big guns such as ELFC and Willis – make sure that they gobble-up large numbers of engines at the outset to ensure they corner the market? Will they be allowed to by the manufacturers? This is all conjecture for a Friday morning, but it is worth thinking about that is for sure.

For airlines, it is likely that the under-reported carbon trading scheme will be supplemented by either carbon offset being added to the price of tickets in some jurisdictions and through taxation –both ideas are being spoken about in Europe and China, which will create a serious problem for level competition. It is a very difficult time for airline press relations and it will get far worse over the coming decade as environmental lobby groups take aim at aviation and the effects it has on our planet. One UK politician had the cheek to state this week that maybe those who fly regularly should have a tax added after their fourth of fifth flight in a 12 month period – All a bit outlandish but all playing to the vocal minority whom at this time seem to carry a great deal of clout on the world stage.

 

 

victoria@aviationnews-online.com
By victoria@aviationnews-online.com May 10, 2019 12:06