It is of course an Air Show week and that means a great deal of press releases going around and stored-up deals being announced. But behind the scenes the main points of interest are: A320ceo lease rates and values outlooks; Rolls Royce/PW and IAE; and MAS. The foremost subject we have already dealt with over the past seven days and so today it is worth brief concentration on the other two subjects. Firstly there is the Rolls Royce saga and the serious fraud office (SFO) investigation, a matter we have devoted a very large word count to over the past 12 months. There is talk and general speculation that the SFO will come down on RR quite heavily during 2014/15.
Also at IAE there has been a house cleaning of late where many top executives have retired or moved on. Now at this stage it should be noted that Pratt & Whitney/IAE decline to comment on rumours and indeed some of the top executives that have left are my personal friends, whom I hold in the highest of esteem, but you cannot escape one set of circumstances that has come from this cleanout of executives – The largest customers of the IAE V2500 engine state to us separately that they are currently without dedicated Pratt & Whitney and IAE reps at this time and it is becoming highly difficult to get answers on V2500 issues and they have no news or information with regard to PW intentions with regard to the GTF. Pratt & Whitney/IAE do need to sort something out at this time as the best product of the moment means nothing without managers who know the customers and can interact and build relationships.
The matter of relationships brings us nicely onto the other talking point of the A320Neo incursion into traditional 737-800 territory. Over the past few years you have to admit that the A320Neo has been an extraordinary weapon for Airbus, with timing and reasoning that will go down as one of the best management decisions and executions in recent business history (all business sectors). The driving force behind the A320Neo is of course John Leahy. Now it looks like he has scored big again with a possible order for Pratt & Whitney-powered A320Neo family aircraft going through with Malaysian Airlines (MAS) at this time according to our sources. This deal would yet again be a blow to the 737Max and would again represent a 737-800 customer going over to Airbus.
Airbus has with the A320Neo battered its way through the doors of many airlines that had previously had the Boeing logo hanging on them. Now it is the job of Airbus to do what Boeing used to do best and build rock solid relationships through its sales and support staff. So the point here is this: As Airbus moves to consolidate over the next few years, Pratt & Whitney needs to get into gear and do the same or else customers of the 737Max may well have an edge with that famous CFMi customer support, which has already counted for a great deal over recent years with orders such as the SAS engine order coming directly by way of customer relationship over product.