DTN News - DEFENSE NEWS: Pratt & Whitney Eyes Asia Growth To Offset F-35 Delays
(NSI News Source Info) TORONTO, Canada / SINGAPORE - February 15, 2012: U.S. aircraft engine manufacturer Pratt & Whitney seeks to increase its post-sales operations, especially in Asia, to mitigate the impact of the U.S slowing its procurement of the F-35 fighter jets, President David Hess said Tuesday.
The maker of engines for the F-35 jet and a unit of conglomerate United Technologies Corp. (UTX), Pratt & Whitney is also experiencing slowing engine sales for older aircraft models, but "we've got other opportunities out there to try and fill the gap," such as by increasing after-sales repair and engineering work, and original equipment manufacturing, Hess told Dow Jones Newswires in an interview.
The U.S. intends to slow the pace of its F-35 procurement program as part of plans to slash a burgeoning deficit, even as some foreign buyers of the fighter--such as the U.K. and Italy--have signaled reductions to their orders. At the same time, Pratt & Whitney is "seeing engine delivery rates declining for some of the legacy programs, like the F-22 (fighter jet), C-17 (transport aircraft), and the F-15s and F-16s (fighters)," Hess said on the sidelines of the Singapore Airshow.
The company also plans to expand its other business segments, including securing more maintenance and repair tie-ups with airlines and military clients.
It announced Tuesday at the Singapore Airshow a number of such deals, such as one with Asiana Airlines Inc. (020560.SE) to maintain engines for three of the carrier's jets, and another to provide engine maintenance for the Royal Jordanian Air Force's F-16 fighters. Pratt & Whitney also secured a contract to provide engines for Korean Air Lines Co.'s (003490.SE) five new Airbus A330 aircraft.
"We see our headcount in Asia Pacific growing significantly in the next five to ten years, particularly as we start to deliver our next generation engines and need more support here," Hess said.
The company has about 4,000 employees in Singapore, China and India, and Hess said headcount growth for this region would be "disproportionately" higher compared to that in North America, declining to give specific figures.
Commercial aviation will be Pratt & Whitney's main well of growth in this region, although military spending could also tick higher amid shifting geopolitical stakes as China expands its armed forces.
"I don't think (growth in military expenditure) will be to the same extent as we see in commercial aviation, as the military opportunities are distributed across the world," Hess said.
"But certainly we're seeing opportunities in Asia, with Japan ordering the F-35, and Singapore being a security partner on the program, and with South Korea and possibly other Asia-Pacific countries looking at acquiring aircraft," he added.
