The decision will put additional pressure on rival Boeing Co. as it ponders the future of its competing 737. Boeing has said that it is unlikely to offer new engines on the plane, but may instead design an entirely new single-aisle jet that could enter service by the end of the decade.
For Airbus, a unit of European Aeronautic Defence & Space Co., the decision to offer new engines on the current A320 means that an entirely new replacement is unlikely to come before 2025, company officials have said.
Airbus hopes that by offering new engines and other small upgrades to the A320 it can boost sales and extend the life of its most popular product before having to undertake a costly new design program. A320s with the new engines are expected to enter service in 2016, according to the people familiar with the plans.
The new engines, offered by rivals GE and Pratt, a unit of United Technologies Corp., are still in development and testing. Pratt's new Geared Turbofan is expected to be available first; GE's LeapX engine will be certified later.
Both engine-makers are promising significant improvements in fuel efficiency that could cut fuel consumption by 15%. Airlines typically regard any fuel savings of 2% or greater to merit the investment. Both firms have also promised reduced maintenance costs on the new engines.
The news would be positive for GE, which is designing the LeapX with French partner Safran SA in a joint venture called CFM. The engine has already been selected by Chinese firm Comac to power the new C919 airliner, expected to enter service in the lucrative Chinese domestic market mid-decade. Airbus's use of the new engine could complicate Comac's plans to export the C919, because an updated A320 is likely to be viewed internationally as a superior product.
New Airbus A320 Engine
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