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The largest part of the civilian aircraft market is the narrow-body segment. This sector is currently dominated by the duopoly of Boeing (NYSE: BA) and the European Aeronautic Defense and Space Company, better known as EADS or Airbus. That company has been in the headlines a lot recently due to its proposed merger with British aerospace and defense giant BAE Systems PLC.

Boeing's 737 and the Airbus A320 family of jets together account for about half of all commercial jets flying today. The 737, with a longer history, account for about 60 percent of the market while Airbus makes up another 36 percent of the total narrow-body jet market. This specific segment of the aircraft market is expected to see demand for roughly 25,000 new aircraft over the next 20 years, or about 70 percent of total deliveries. The narrow-body segment will represent approximately half of the $4 trillion worth of big commercial jets the two firms are expected to deliver by 2030.

When searching for profits in that industry, however, investors do not have to stop at just those two companies. Investors can look at some of the companies which supply the aircraft makers critical parts such as engines. Take Pratt & Whitney, for example, which is part of conglomerate United Technologies (NYSE: UTX). Before UTX's recent acquisition of Goodrich, Pratt & Whitney represented about 25% of its revenues. So its fate is important to the future of United Technologies and its shareholder.

The company has been working on a 20-year, $1 billion program to come up with a new gearbox and a 'geared' engine which will slash fuel consumption by up to 16 percent in comparison to a conventional engine. The company also estimates that it can achieve another 10 percent boost in efficiency by 2017. The gearbox will all be part of a brand new PW1000G family of engines, which the company brands as Pure Power. The engines will be available for new aircraft including the Airbus320neo (but not Boeing) in 2013 and sales should ramp up strongly after that.

The project is just now coming to fruition, already attaining orders for more than 2,900 engines, and should make Pratt & Whitney a name to be reckoned with in the growing market to power narrow-body jets. The company had been shut out of the market for narrow-body jets for decades after it decided not to partake in helping to power the Boeing 737.

However, the new Pratt & Whitney engine has some tough competition. The main competition to the PW1000G engine will come from the Leap engine from CFM International, a 50/50 joint venture between France's Snecma, a division of Safran SA and General Electric (NYSE: GE). This engine will be used on the Boeing 737 MAX and the Airbus320neo, in addition to other narrow-body jets has garnered orders so far for 4,150 of them. CFM and Pratt & Whitney have each split about 50/50 the orders for the Airbus320neo, the only aircraft where they directly compete at the moment.

Pratt & Whitney and CFM have taken two vastly different approaches to developing the new engines. CFM is using current engine technology but, thanks to GE, is introducing new materials into building the engines along with a larger fan. Meanwhile, Pratt & Whitney has engineered an entirely new engine. It is a geared engine where the engine's turbine runs at three times the fan's speed, giving the engine optimum performance.

It remains to be seen which approach will work best over the long term of years of use. But investors should at least take a look at Pratt& Whitney's parent United Technologies. Along with its Goodrich acquisition, the new engine may once again make it a powerhouse in the aerospace industry.

Source: Narrow-Body Jet Engines To Mean Wide Profits