How much would it cost for a large airline to switch engine manufacturer for their planes?

Question

I am trying to understand how much of a hassle and cost it would be for a large civil airline, who already had lots of installed Rolls Royce engines on its fleet, to switch over to GE engines on new planes they have ordered. For example if they opted for the RR Trent 1000 on a 787 initially but then changed new orders of 787's to have the GEnx-1B.

Very intangible I know, but would it be fair to say that switching would require some difficulty including:

1. retraining of pilots
2. changing maintenance schedules
3. additional uncertainty over performance and fuel efficiency

Alternatively, I could be wrong, and the airline will likely just switch to the GE if it thinks it can gain a small fuel burn advantage, in which case RR's back book of engines does not mean clients will opt for the RR engine choice going forward.

Answer 1

Many (especially larger) airlines have a history and infrastructure for engines from a specific manufacturer and are unlikely to change that, the cost would extend far beyond just the cost of changing the contract. E.g. KLM has a massive investment in maintenance facilities for GE engines, workshops, spare parts warehouses, highly trained specialised technicians. Retooling to RR would be prohibitive for them.

Of course a smaller operation without maintenance facilities of their own might be more flexible in that and just buy whatever is cheapest at the time, contracting out maintenance to various companies as needed. But even then, it's often more economical to have a single maintenance provider doing all your work for you, which might well mean a provider who's specialised in a single series of engines, for example if you're based at Schiphol there's a good chance you'll be contracting out your maintenance to KLM and their GE specialised shops.

So there are many good reasons for airlines to stick with a single engine supplier (and to a degree with a single aircraft manufacturer), even if the cost of buying those engines is higher than selecting competing engines from another manufacturer.
Say you're going to save 0.1% in your fuel bills for the 2 new aircraft you're buying to increase the fleet of 20 with other engines you have already (and that's a big if, those engines are pretty close between manufacturers for a specific aircraft). You'd need to fly a LOT for it to be worth building an entire duplicate maintenance network just for those few new aircraft.

Of course if it's part of a long term plan to replace the entire fleet with aircraft using that other manufacturer's engines, that's a different story. But mixed engine fleets tend not to be the most economical way to go, even if on one type manufacturer A is marginally more fuel efficient and on type B manufacturer B is marginally more fuel efficient (and that's what you're going to see, marginal differences only).
If you're talking an operation like Delta or United, with hundreds of aircraft of each type, it might be a different story. But then too you're talking about more aircraft with each manufacturer's engines than most other airlines have in total, and they'll have multiple maintenance shops themselves, making it easier to have a facility for each manufacturer (and of course in case of the big US airlines, they tend to have ended up with that in the course of gobbling up other airlines anyway).

Answer 2

There are obvious costs in having a mixed fleet. Particularly in engineering support infrastructure. But large airlines have less of a problem

There must be some negotiating advantage in having a mixed fleet, when buying engines the maker knows you can switch more easily than an all-GE airline or all-RR airline.

Take as an example BA, with a fleet of 290 aircraft

Switching

BA's first 777s were fitted with General Electric GE90 engines, but BA switched to Rolls-Royce Trent 800s for subsequent aircraft.

^Wikipedia

Have an engine maker maintain it's rival's engines?

British Airways has agreed to a $2.3 billion engine maintenance contract with General Electric ... Under the 10-year agreement, GE will be responsible for the maintenance, overhaul and repair for British Airways' RB211-524 and CFM56 engines. The Rolls-Royce RB211 engines power the airline's 57 Boeing 747s and 21 767s. The CFM56 engines power the airline's 34 Boeing 737s and 10 Airbus A320s.

^{http://www.geaviation.com/press/services/services_20051208.html}

Share costs with other airlines?

Airlines can also share maintenance facilities, which is a way of reducing maintenance costs.

Since January 2012 most heavy maintenance on the Boeing 737-400 Gatwick-based fleet has been done at the Lufthansa Technik maintenance facility in Sofia, Bulgaria

^Wikipedia

Other large airlines

• AA have a mixed fleet of 627 aircraft with both GE and RR engines.
• UA have a mixed fleet of 700 aircraft with both GE and RR engines

Conclusion

I think you'd find it hard to come up with a specific figure for switching between GE and RR because it depends very much on arrangements any specific airline has in place (e.g. wet-leasing) and on the terms it is able to negotiate with engine makers and maintenance organisations.

Answer 3

Switching cost depend a lot on the airline and how they handle their relations with the engine manufacturers. For a well-run airline, switching cost are near zero.

Big airlines have an interest in keeping a healthy competition alive, and they have an advantage in running engines from all the big engine manufacturers. If all aircraft in the fleet would have engines from the same manufacturer, the airline's negotiating power for future engines would be quite limited. If, on the other hand, they have experience with several manufacturers and could be equally likely to buy from either, they can expect to negotiate steep discounts from all of them. Normal discounts are already 30%, but the real prices are confidential.

The same goes for airframes, that is the reason why most airlines have a mix of Boeings and Airbuses. Some have political constraints, but the well-run airlines try actively to avoid a monopoly. Exceptions are/were JAL, who are under pressure to buy American only, or in the past Swissair, which had only McDonnell-Douglas aircraft, because the airline was heavily staffed with ex Swiss Air Force pilots who had an unhealthily close connection with that manufacturer.

This is nothing airline-specific, but a basic principle for any good purchasing manager. Manufacturers try to drive switching cost up, and the customers try to drive switching cost to zero.