19 April 2018, Global – Following the uncontained explosion of the CFM56-7B engine on Southwest Airlines’ aircraft, we expect the US Federal Aviation Administration and potentially other aviation regulators around the world to issue directives requiring the CFM56-7B engines to undergo inspections. The more pragmatic airlines may also voluntarily undertake their own inspections first. Globally, the US and Chinese airlines have the largest number of aircraft in service that are powered by the CFM56-7B engines. ST Engineering (STE:SP)’s Aerospace division has the capability to service the CFM56-7B engines and would benefit from the increased engine overhaul demand.
Asia Pacific region has the largest CFM56-7B engine exposure
Globally, there are 6,530 aircraft in service, mainly the Boeing 737-700/800/900 aircraft, that are powered by CFM56-7B engines which could be impacted by these inspections. By region, Asia Pacific airlines have the largest exposure, operating 2,372 aircraft (or 36% of total) that are powered by the CFM56-7B, mainly deployed on short-haul domestic and regional routes. This is followed by North American carriers which operate 1,994 such aircraft (31%) and European airlines which operate 1,446 such aircraft (22%).
Chart: Number of aircraft in service powered by CFM56-7B engines in each region (2018)
Southwest Airlines, Ryanair, United Airlines, China Southern Airlines, American Airlines have the largest number of aircraft powered by CFM56-7B engines
The top 10 airlines with the largest number of aircraft powered by the CFM56-7B engines are US and Chinese carriers (with the exception of Ryanair). These include Southwest Airlines (LUV:US), Ryanair (RYA:ID), United Airlines (UAL:US), China Southern Airlines (1055:HK), American Airlines (AAL:US), China Eastern Airlines (670:HK), Air China (753:HK), Delta Air Lines (DAL:US), Alaska Airlines (ALK:US) and Hainan Airlines (600221:CH) which could potentially face service disruptions if they need to conduct these aircraft engine inspections within a short span of time.
Chart: Top 20 airlines with the largest number of CFM56-7B engines powered aircraft globally (2018)
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