Pratt & Whitney is accelerating the development of its XA103 engine for the U.S. Air Force's NGAP program by utilizing advanced digital design models, which are helping to shorten development times, reduce costs, and improve design efficiency. The company has invested over $30 million in enhancing its digital environment, enabling faster data sharing and collaboration across its engineering teams and suppliers. The engine is expected to undergo testing in the late 2020s.
Spirit Airlines stock surged 17% after raising its fourth-quarter forecast, expecting revenue of about $1.3 billion and improved negative margins of 12% to 13%, citing strong bookings, lower fuel costs, and progress in discussions with Pratt & Whitney regarding compensation for an engine issue. This comes after a recent decline in shares following a judge's ruling blocking JetBlue Airways from acquiring the budget carrier.
Pratt & Whitney has warned IndiGo that a powder metal contamination issue could result in around 80 of the airline's planes being grounded in the first quarter of 2024. Already, nearly 50 IndiGo Airbus A320neo planes have been grounded for months, awaiting replacement GTF engines from Pratt & Whitney. The ongoing engine troubles could lead to a capacity crunch for IndiGo, potentially causing a spike in airfares. The GTF engines have been plagued with issues for several years, prompting the Indian aviation regulator to direct Pratt & Whitney to establish a maintenance repair overhaul (MRO) facility in India.
RTX reported better-than-expected quarterly earnings, driven by strong performance at its Collins Aerospace unit, which offset the impact of a quality crisis at engine-making unit Pratt and Whitney. The company also approved a $10 billion share repurchase program funded through debt. Despite the engine recalls and compensations, RTX raised its outlook for 2023 and expects free cash flow of $4.8 billion. RTX is also accelerating inspections and manufacturing replacements for potentially contaminated engine parts. The company has entered into an agreement to sell its Cybersecurity, Intelligence and Services business for around $1.3 billion to private equity firm Blackstone.
RTX Corp, the parent company of Pratt & Whitney, announced a $3 billion charge and warned airlines that hundreds of their Airbus jets would be grounded at any one time in the coming years due to a rare manufacturing flaw in the Geared Turbofan series. The company estimates that between 2023 and 2026, a total of 600 to 700 engines will need to be pulled off Airbus A320neo jets for lengthy quality inspections, resulting in an average of 350 planes being grounded per year. The repair work, initially expected to take 60 days, is now projected to last up to 300 days per engine. RTX shares fell 7.9% following the announcement.
RTX Corp.'s Pratt & Whitney unit has expanded the scope of required engine checks, affecting nearly its entire fleet of turbines powering Airbus A320 planes. Around 3,000 Pratt & Whitney geared turbofan engines will be removed over the next three years to check for potentially flawed components made from contaminated metal powder. This will result in about 350 aircraft being parked per year through 2026 on average, with the figure peaking at about 650 planes in the first half of 2024. The engine troubles add to the challenges faced by airlines as they work to rebuild operations post-pandemic. RTX also cut its full-year sales outlook and expects a financial hit of up to $3.5 billion over the next several years.
RTX, formerly known as Raytheon Technologies, announced that it will take a $3 billion charge on its pretax results this quarter due to an engine manufacturing flaw affecting Pratt & Whitney GTF engines. The flaw requires accelerated inspections, resulting in the removal of 600 to 700 engines for shop visits through 2026. This issue will cost up to $7 billion and is expected to impact cash flow by $1.5 billion in 2025. Despite the financial impact, RTX reaffirmed its adjusted earnings estimates for 2023.
The National Transportation Safety Board (NTSB) has determined that the engine failure on a United Airlines jet over Denver in 2021 was caused by inadequate inspection of a fan blade, which had developed undetected cracks. The NTSB found that manufacturer Pratt & Whitney did not call for frequent enough inspections, allowing the cracks to grow until the blade broke. The design and testing of the engine inlet also contributed to the severity of the incident. Following the incident, the Federal Aviation Administration (FAA) grounded all U.S.-registered planes with the same engines. This incident raised concerns about fan blade failures occurring earlier than expected, leading to the FAA implementing more frequent inspections. Pratt & Whitney has not yet commented on the NTSB's findings.
Lockheed Martin and Pratt & Whitney have been awarded over $1 billion in contracts by the U.S. Navy for the procurement of parts and equipment for the F-35 Joint Strike Fighter. Lockheed received a $347 million contract modification for helmet-mounted display systems, as well as another modification worth up to $607 million for long-lead time materials and components to build 173 F-35s for Foreign Military Sales customers. Pratt & Whitney received a contract modification valued at over $59 million for advanced long-lead time hardware for the F-35's F135 engines. The work will be carried out in various locations, including Fort Worth, Texas, and East Hartford, Connecticut.
Major airlines, including Spirit, JetBlue, Hawaiian Airlines, and Wizz Air, are grappling with flight cancellations and grounded planes after aerospace company Pratt & Whitney issued a recall on thousands of engines used to power A320neo Airbus jets. The recall, affecting around 1,200 engines, is due to contaminants found in the metal used to build the machines and could take up to two months for inspections. This is likely to impact the remainder of the summer travel season and potentially the holiday travel window. Airlines are facing revenue slumps and schedule changes as they scramble for parts and deal with maintenance issues.
Several airlines are reducing flights due to ongoing engine problems with Pratt & Whitney engines, which have experienced issues such as engine failures and mid-flight shutdowns. The engine troubles have led to increased inspections and maintenance, causing disruptions in flight schedules and potential financial losses for the affected airlines.
Spirit Airlines will ground seven Airbus A320neo planes due to an issue with Pratt & Whitney's GTF engines, following a quality control problem with the engines' manufacturing. RTX, the owner of Pratt & Whitney, expects around 200 engines to be inspected by mid-September and another 1,000 engines within the next year. The grounding of the planes will impact Spirit Airlines' September revenue, as it is the largest operator of GTF-powered NEO planes in the U.S. The budget carrier may need to remove more engines in the future, and this development adds to the financial challenges the airline has already faced due to weather issues and air traffic control challenges.
RTX Corp, formerly Raytheon, announced that a significant number of its Pratt & Whitney GTF engines, which power Airbus A320neo jets, will require accelerated removals and inspections due to a rare condition in the powder metal used to manufacture certain engine parts. This announcement caused RTX shares to drop 12%. The issue is not an immediate safety concern, and there will be no impact on engines currently in production. RTX reduced its 2023 cash flow forecast by $500 million but increased its sales expectation. Airbus stated that A320neo deliveries would not be affected, and it would work with airlines to minimize disruption.
Lockheed Martin's advocacy for the Adaptive Engine Transition Program (AETP) as an alternative engine for the F-35 has caused tensions with engine producer Pratt & Whitney, who feel betrayed by the public comments. Pratt executives accused Lockheed of attempting to delay or stop the Air Force's Next Generation Air Dominance program and seeking greater longevity on the F-35 line that would distract from or defeat the purpose of a new, sixth-generation fighter. The disagreement centers around the future of the engine and the need for a sixth-generation fighter.
Lockheed Martin publicly supports the Adaptive Engine Transition Program (AETP) for the F-35 fighter jet, which would provide greater power and cooling capabilities beyond upcoming Block 4 upgrades. This breaks with the Pentagon's decision to upgrade the fighter's current Pratt & Whitney-made engines. Pratt & Whitney rebuked Lockheed's statement, saying that an AETP engine is unproven and better suited for a sixth-generation aircraft. The Pentagon decided to go with the Engine Core Upgrade in the fiscal 2024 budget proposal, but the House Armed Services Committee proposed funding for both options.
