Airline route planners around the world are working on new schedules after Pratt & Whitney parent RTX Corp (RTX.N) took a $3 billion charge and told airlines hundreds of their Airbus jets would be grounded at any one time in coming years to check for a rare manufacturing flaw. The company, formerly named Raytheon Technologies, said a portion of its PW1100G-JM engine fleet, which powers the Airbus A320neo aircraft, will need “accelerated removals and inspections” within the next nine to 12 months, including 200 accelerated removals by mid-September. It lowered its 2023 cash flow estimate by $500 million.
The problem stems from contaminated powder metal used to make some engine parts. That discovery prompted RTX to announce in July that the engines on its A320neo jets, which power more than 40% of the global commercial airplane fleet, would need earlier-than-expected inspections. That will cause more planes to be on the ground, which RTX estimated will reduce its pretax profit by $3 billion over the next several years.
RTX said it would issue a service bulletin in the next 60 days laying out an inspection protocol for high-pressure turbine and compressor disks, which will be replaced during shop visits as needed. That will help limit the impact on flights, it said. The company also expects to release a maintenance manual in 2024 to clarify the procedure for replacing those parts. RTX is studying the impact of the quality issue on its other engine models, but that will be far less significant, it said.
RTX’s stock hit a two-year low on Monday as investors feared the problem would lead to fewer flying options for airline passengers. This year, it has slid almost 20%, outpacing the 5% drop in the S&P 500 Index. That underperformance is mainly due to the engine issue, analysts said. It’s the latest in a spate of durability problems for Pratt & Whitney’s Geared Turbofan series, which RTX — then named Raytheon — acquired through an industry merger in 2020.
