(Bloomberg) -- The high stakes of the Paris Air Show bring out passions as companies vie for multibillion-dollar deals and splashy headlines. Just ask the engine makers.
Even before Indian low-cost airline IndiGo said it would switch from Pratt & Whitney engines to a competing General Electric Co. model for its next batch of jetliners, the sniping from company leaders was under way. Pratt President Bob Leduc said early at the show that “GE was willing to be more aggressive than we were” in cutting its price to win the order.
That drew a rebuke from David Joyce, the chief executive officer of GE Aviation, who said his company got an economically attractive deal and that IndiGo was simply looking for a more reliable model than Pratt’s geared turbofan, which has had well-documented technical stumbles.
“Those of you that have read the press over the last two years know the trials and tribulations that IndiGo has had,” Joyce said at a meeting with analysts. “They’ve had their fair share of problems.”
The sharp words underscore the tension between the manufacturers as they try to capitalize on a growing market for commercial air travel. The closely watched air show is a marquee forum for engine makers, plane builders and airlines to showcase big deals, new products and future plans.
The stakes are particularly high for GE and Pratt, which are counting on aviation to buoy their prospects. GE’s engine unit has been a rare bright spot as the conglomerate struggles with a stock slump and cash-flow challenges. Pratt parent United Technologies Corp. meanwhile is shedding non-aerospace operations and plans to merge with Raytheon Co. in a major bet on aviation and defense.
GE got the better of its rival in Paris, winning both the $20 billion IndiGo agreement and 74% of the engine orders for A320neo planes through Wednesday, according to research firm Cirium. The Airbus narrow-body jet is the one plane where Pratt and GE, through its CFM International joint venture with France’s Safran SA, compete head-to-head with new models.
A320neo buyers picked CFM’s Leap engine for 575 jets, including 280 by IndiGo and 100 by AirAsia, while Pratt’s GTF was the choice on 202 of the aircraft, according to Cirium. Pratt’s biggest announced order came from Chile’s JetSmart, which picked the GTF for at least 70 planes.
Despite the disparity, there was “healthy” order activity for both engine makers, Jefferies analyst Sheila Kahyaoglu said in a note. She downplayed the IndiGo decision, saying it “appears to be largely based on price.”
CFM said Wednesday that it won $50.2 billion in orders for the Leap engine during the show. That doesn’t include power plants for the 200 737 Max planes that British Airways owner IAG SA said it would buy for its airlines. CFM is the sole engine provider for Boeing Co.’s troubled jet.
Pratt didn’t immediately respond to requests for a total dollar figure.
The engine maker’s fortunes turned on the blockbuster IndiGo deal, an expected but nevertheless significant decision by the Indian airline. IndiGo had been a launch customer for the GTF, making its Leap order a particularly tough blow for Pratt.
While Pratt’s Leduc suggested his competitor was willing to cut price significantly, Joyce said he had already walked away from IndiGo three previous times because of the airline’s “completely unacceptable” price demands.
“I was ready to walk a fourth time,” the GE executive said. “This is a very healthy deal for us.”
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