ISTAT Jetrader - Autumn 2023 - 36

APPRAISAL
generation of engines runs hotter than
the previous generation, a necessity
to improve fuel efficiency. The new
design and manufacturing challenges
to operate at high temperatures
have been met with more advanced
manufacturing techniques, innovative
alloys and surface treatment
methodologies to enhance the physical
properties of the components.
The PW1100G-JM has suffered
engine durability issues since its entry
into service in 2016. These issues
have been more pronounced in harsh
operating environments. Issues of note
have been bearing compartment seal
degradation and the durability of the
combustion liner.
Current Market
Overview
Twenty-five percent of operating
PW1100G-JM are with two airline
groups, both coincidentally called
Indigo. Indigo Partner's stable of
airlines (Frontier, JetSmart, Volaris and
Wizz Air) account for nearly 15% of the
delivered A320neo family aircraft with
PW1100G-JM engines as of June 2023.
Indian low-cost carrier IndiGo has
nearly 11% of deliveries.
As regards outstanding orders,
Indigo Partners has 450 GTF-powered
A320neos pending as of 30 June
2023. But their Indian namesakes
look to have turned their back on
GTF-powered aircraft, with none of
approximately 480 A320neos still on
order prior to the 2023 Paris Air Show
slated to be powered by the GTF.
A320neo FAMILY PW1100G-JM
OPERATORS/LESSORS AS OF JUNE
* 34% Indigo Partners
* 23% Others
* 11% JetBlue &
Spirit Airlines
* 7% Delta Air Lines
* 7% United Airlines
* 5% LATAM Airlines
Group
* 4% Go First
* 4% Air Lease Corp
* 3% Turkish Airlines
* 2% Vietjet Air
IndiGo ordered a further 500 A320neo
family aircraft in Paris, but it remains to
be seen which engine they will choose.
The PW1100G-JMwas selected
by United Airlines on 18 June 2023
for its order of 70 A321neos and 50
A321XLRs. It also is the engine of
choice of both Spirit and JetBlue.
Adding Delta and Lufthansa to this list,
Pratt & Whitney has a relatively narrow
but extremely deep liquidity pool of
Tier 1 North American and European
operators for the PW1100G-JM. This
geographical footprint is also arguably
the most appropriate operating
environment that will see the engine
perform at its best.
Value Perspective
The durability issues that the
PW1100G-JM has faced has caused
unscheduled removals of the engines.
This has resulted in strong demand
for spare engines, pushing up monthly
lease rates. This has also led to Pratt
& Whitney producing additional spare
Current
Monthly Lease
Rate*
$140-160k
Current
Market
Value
$9.25
Current
Base
Value
$8.5
engines to support customers.
Pratt & Whittney plans to introduce
a new variant of the PW1100G-JM
named the Advantage (PW1100G/2-JM)
sometime in 2024. Material provided
by Pratt & Whitney states that this
variant will provide 4-8% more takeoff
thrust and 1% lower fuel consumption
as compared to the current version and
will be focused on providing an engine
variant tailored to the requirements of
the A321LR and A321XLR. However,
it may also address some of the
durability issues that have dogged the
current variant. The " Advantage " is that
this variant is completely backward
compatible with all GTF-engined A320
family aircraft currently operating.
Should the Advantage provide a marked
improvement in durability over the current
variant, values for the current variant
would be negatively impacted.
Editor's Note: This article was written
on 30 June 2023 before Pratt & Whitney
issued a recall notice on 1,200 PW1100GJM
engines.
PW1100G-JM - Ishka Values at June of Each Year
2024
$8.42
2025
Future Base Values at 2.0% inflation
2026
$8.29
Maintenance assumptions: Half-life condition (50% of LLPs and Shop Visit Life Remaining)
*Lease Rate assumes 2-3 year lease
All Values in $US millions
36 * THE OF F I C I AL PUBL I CAT I ON OF ISTAT
$8.16
2027
$8.04
Engine Specifications as per variant and relative thrust rating excluding Quick Engine Change (QEC) kit accessories and stand
2028
$ 7.88

ISTAT Jetrader - Autumn 2023

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