Yet as CFM wrestles with the balancing act of transitioning from the CFM56 to the Leap at record rates, one persistent question remains: Does the phenomenal backlog for the A320NEO and 737 MAX represent a bubble that is about to burst? Not according to Ebanga, who says, “You can look at market stability in either the short term or the long term. If you take the long-term perspective—and had an assumption of world economic growth and development of the emerging economies—well, plugging in our forecast makes these assumptions really solid. So I'm not afraid about what we're saying in terms of orders—we are in a good band of strength.”
The airline industry itself has shown great resilience through the bad times, and will continue to be robust, Ebanga believes. “From time to time there is a crisis. Maybe tomorrow there will be something unforeseen, who knows? We see and face minor adjustments along the way all the time, but overall the forecast is very solid. For example, four to five years ago it was said that there would be no more financing available for the market, so there was a kind of negative consensus about whether airlines would be able to finance growth, but they found solutions. Crisis after crisis, this industry managed to find an appropriate answer.
At the Farnborough gathering in 2012, for instance, all the news was all about the depth of the euro currency crisis. But we said, 'We are not panicking and we think the outlook is good.' And look at this year. In 2013 IATA [International Air Transport Association] is forecasting a good year for the entire industry—the fourth good year in a row. The last time we experienced three consecutive good years was in the late 1990s.”
The market continues to be buoyant and, because of relentless demand, will likely remain so for the near term, adds Ebanga. “Over the next 20 years there will be a need for around 30,000 new aircraft of which two-thirds will be in the narrowbody market, therefore in CFM's playground. That's between 20,000 and 40,000 engines, so it is a pretty significant playground! So when you look at this size of this market—particularly being sole source on the MAX and C919—we have a large share. There are enough things to do, and it is a challenge because there is no substitute to this new generation of engine, so we have to deliver it because this is what the industry is looking for.”
Although the early campaigns over engine selections for NEO drew some inevitable “incentive” pricing, the dynamics of the market have since settled, says Ebanga. The outcome appears to be a more level playing field which CFM welcomes, he adds. “We would like the competition to succeed because our ultimate objective is to have a flourishing engine industry. We do not pretend to do it all. The better the industry performs, the better we will all be in the future. The other guys will build on their own experience. I cannot speak for Pratt & Whitney, but it would be appropriate for them to build on the IAE product.”
However, the battle is far from over, says Ebanga. “The market has been very competitive for the CFM56, and I think it will be the same for the Leap generation of engines. With every single launch of a new program, either narrowbody or widebody, you have had for several years a specific dynamic as the market sets up. After that it enters a second phase and although it is still tough, we can call that a normal competitive phase. It will not be any different for the new and/or current engine option or other programs. This will continue forever.”
For now, CFM is content to focus on its current commitments rather than seek new opportunities, says Ebanga. “Today we are 100% part of the plan for the MAX and Comac, as well as 50%-plus for NEO. We are well set and our plate is full. We would prefer to deliver on our commitments to them rather than chase the next opportunity and fall short on our deliveries to all our existing customers. It required courage and an appropriate level of willingness to stay restrained,” he says.
So will the next-generation CFM engine be conventional or an open rotor? “It could be an open rotor,” says Ebanga. “But more important than that is the philosophy we have used for a decade to always have a pipeline filled with technology, and to wait for the time when a new platform is launched to assemble that technology for the best solution—that is what we did for Leap. We strongly believe what we did for the Leap is the optimal approach. But in 2030, what will the airframe architecture be? Will the airframe companies push the envelope? The jury is still out, but we are working right now on a next-generation suite of technologies that would support an open rotor.”
While potential new engine architectures are somewhere in the distant future, Ebanga is focused on more fundamental changes closer to home.