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The Next-Gen Engine Challenges
As the aviation industry continues to navigate supply chain disruptions and reliability concerns, the challenges surrounding new-generation engines remain a critical focal point.
Read all of the latest updates from Ascend Consultancy experts who deliver powerful analysis, commentaries and projections to airlines, aircraft build and maintenance companies, financial institutions, insurers and non-banking financiers.
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Yiru Zhang
Senior Valuation Analyst
Cirium Ascend Consultancy
Persistent Challenges in the PW1100G Fleet
As the aviation industry continues to navigate supply chain disruptions and reliability concerns, the challenges surrounding new-generation engines remain a critical focal point. As of March 10, 2025more than 600 PW1100G-powered A320 family aircraft remain parked, accounting for 35% of the global fleet. While some suggest the worst may be over, caution is warranted. In contrast, the parked LEAP engine fleet is small and continues to decline in line with seasonal trend, signaling a more stable trajectory for its operational fleet.
RTX reported $1.1 billion in GTF engine compensation payments in 2024, with further projected payouts between $1.1 and $1.3 billion in 2025, underscoring the financial burden caused by ongoing groundings. These payments are issued as aircraft-on-ground (AOG) incidents occur, reflecting the sustained impact on airline operations.
Source: Cirium Core, 10 March 2025 (aircraft classified as parked following 7 continuous days of inactivity and therefore subject to restatement in near-term)
Engine Production and Delivery Constraints
RTX, the parent company of Pratt & Whitney, has signalled a 14% increase in large commercial engine production in 2025, with a slight increase in installations relative to additions to the spares pool. Cirium Ascend Consultancy’s analysis-driven 2025 delivery projections appear to show downside risk when compared to statements made by RTX as well as its competitor, in terms of supporting airframers to achieve their delivery targets for 2025.
While the powder metallurgy issue is expected to be largely resolved within the next 18–24 months, other technical and supply chain challenges persist. The uncertainty surrounding next-generation engine technologies through 2030 is prompting airlines to retain CFM56 and IAE-powered aircraft longer than initially planned. This trend suggests sustained demand for older-generation engines well into the 2030s, albeit at lower price points than currently.
Market Value Trends in Single-Aisle Aircraft
The following analysis of fleet-weighted market values for key single-aisle aircraft, indexed to December 2019 levels, highlights some notable trends:
Source: Cirium Core Current Market Values indexed to December 2019, on a fleet-weighted and constant-age basis
The A320ceo and 737-800 have shown the most significant value appreciation. Mid-life 737NG values saw an uptick in Q1 2025. The A320ceo family is currently under review, but both A320 and A321 are expected to show a stable trend alongside other mid-life narrowbody aircraft.
Older-generation aircraft values remain robust, supported by strong engine demand. Data indicates that lease extension levels are higher through 2023 and 2024 than in the latter years of the prior cycle. While demand for CFM56 and IAE engines remains solid over the next three years, supply constraints could ease once new production ramps up and more aircraft undergo part-out. A potential weakening in macroeconomic conditions and passenger demand could accelerate this timeline, but for now, the market remains resilient.
Despite production increases, PW1100G-related disruptions will likely persist for the rest of the decade, reinforcing the need for strategic fleet planning among airlines and lessors.
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