As the firm published earnings, RTX Corp (RTX.N), formerly Raytheon, indicated that a “significant portion” of its Pratt & Whitney GTF engines that power Airbus A320neo jets will require “accelerated removals and inspections,” sending shares down 14%.
“Pratt & Whitney has determined that a rare condition in powder metal used to manufacture certain engine parts will require accelerated fleet inspection,” RTX stated on Tuesday, mandating an inspection of 1,200 out of more than 3,000 engines over the next nine to twelve months. According to the manufacturer, there was no influence on engines in production.
According to a source acquainted with the situation, there is no immediate danger. According to the source, RTX began contacting consumers about the issue last week. Raytheon Technologies Corporation formally changed its name to RTX Corporation in June 2023.
As a result of the engine issue, RTX reduced its 2023 cash flow prediction by $500 million to $4.3 billion, while increasing its 2023 sales forecast from $73 billion to $74 billion, compared to its previous forecast of $72 billion to $73 billion.
According to Cirium statistics, major clients who purchased Airbus (AIR.PA) A320neo jets with PW1100G-JM engines during the timeframe included Spirit Airlines Inc (SAVE.N), JetBlue Airways (JBLU.O), and Wizz Air (WIZZ.L). During trading in Paris, Airbus stock was down roughly 0.5%. In early trade, Spirit shares were down 2.8%, while JetBlue shares were down 5.3%. In London, Wizz Air shares were down approximately 3.2%.
Airbus stated that there would be no impact on A320neo deliveries and that it would continue to cooperate with airlines to minimize interruption to their fleets.
Spirit, Wizz Air, and JetBlue did not reply quickly to requests for comment. Next week, JetBlue and Spirit will report results.
