Honeywell to Equip Embraer Aircraft With HTF7500E Engine

Honeywell International Inc. HON recently announced its decision to equip two Embraer aircraft models — Praetor 600 and Praetor 500 — with the HTF7500E engine. The company will also work on powering these models with its cabin-related management systems, auxiliary power units, pressure and control systems, environmental controls apart from optional inertial reference units. The announcement was made at the National Business Aviation Association 2018 event.

As a part of the company’s HTF7000 family of engines, the HTF7500E engine has a solid track record of high reliability as well as low cost of ownership. Notably, the HTF7500E's full power capability and impressive fuel efficiency have helped Embraer to attain a 3,900-nautical-mile range for its aircraft, Praetor 600, and 3,250 nautical miles for Praetor 500.

Touted as an environmental-friendly product, the HTF7500E engine meets the requirements of the International Civil Aviation Organization's environmental protection standards. Supported by Honeywell's global support network and its maintenance service plan (MSP), the engine will enable the operators of Praetor 500 and Praetor 600 to enjoy predictable costs as well as improved dispatch reliability compared to non-MSP operators.

Apart from the engine, the Praetor 600 and Praetor 500 will be equipped with Honeywell’s 36-150 auxiliary power unit — the Ovation Select Cabin Management System, cabin pressure control systems, environmental control systems as well as LASEREF VI inertial reference system.

Separately, the company also released its 27th annual Global Business Aviation Outlook, where it anticipates the business jet industry to perform well in short to medium-term period. For instance, the company raised its 10-year business jet delivery forecast to 7,700 new business jet deliveries, valued at $251 billion, from 2019 to 2028. Notably, the forecast is up by about 2 percentage points from last year’s prediction.

For the next five years, purchase plans are higher in North America and Europe. However, the same is lower in Latin America, Middle East, Africa as well as Asia Pacific due to slow economic growth.

Our Take

Strength in commercial aviation and strong demand in its commercial fire and connected building technologies are likely to drive Honeywell’s revenues in the upcoming quarters. Also, increased technology spending by the global commercial aviation industry and higher demand for state-of-the-art technology solutions should continue to aid the company's top-line growth. For 2018, it expects organic sales growth of 5-6%.

Moreover, the company anticipates greater operational excellence, stock buybacks and corporate tax benefits to continue driving its profitability. Honeywell also raised its full-year earnings view to the $8.10-$8.20 per share range, from the previous projection of $8.05-$8.15.

However, strong competition from various big and small market players, including General Electric Company GE, United Technologies Corporation UTX and Crane Company CR, remain a threat to Honeywell's profitability.

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