An average of 350 Airbus (AIR.PA) A320neos will be grounded until 2026, according to aerospace supplier RTX (RTX.N), when its Pratt & Whitney engines business removes geared turbofan engines (GTF) for quality inspections.
RTX, previously Raytheon, said it now anticipates pulling 600 to 700 engines off planes for inspections as a result of a materials problem that might result in the breaking of specific engine components. RTX originally disclosed the material defect in July.
The GTF problem, according to preliminary estimates, might result in a 10% capacity reduction in the second half of 2024, according to European low-cost carrier Wizz Air (WIZZ.L).
RTX CEO Greg Hayes initially predicted that repairs would take 60 days, but current estimates range from 300 days to 600 days per engine, with the majority of engine removals taking place in 2023 and early 2024.
The problem is the latest setback for the ailing GTF engine, which has been dogged by durability issues that have compelled carriers to put airplanes on the ground.
The issue might cost the company’s earnings up to $3.5 billion before taxes over the following several years. The problem also prompted RTX to cut its estimated reported revenues for 2023 by $5.5 billion and its objective for free cash flow for 2025 from $9 billion to around $7.5 billion.
Early trading saw RTX shares drop to a two-year low of $78.80. Shares of Airbus decreased by 1.3%.
German partner MTU Aero Engines (MTXGn.DE), which owns 18% of the GTF program, cautioned that this year’s results might have an effect on its own sales and profit, but said that it was still too early to make a precise prediction.
