Airlines prepare for impact of Pratt & Whitney’s new engine issue.
Airlines prepare for impact of Pratt & Whitney's new engine issue.
Airline Executives Fume as Fresh Problems Arise with Pratt & Whitney Engines
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CHICAGO/PARIS, July 26 (Reuters) – Airline executives are fuming about the prospect of grounding planes and trimming flight capacity amid a busy summer travel season after fresh problems arose with some of RTX’s (RTX.N) Pratt & Whitney engines. Pratt & Whitney’s latest snag, revealed on Tuesday, will impact at least 1,200 of its Geared Turbofan (GTF) engines that power Airbus’ (AIR.PA) popular A320neo jets and will need up to 60 days to inspect and fix after microscopic contaminants were found in a metal used in part of the engine core.
A Nasty Surprise for Airlines
While few airlines commented publicly about the engine contamination issue, multiple senior airline executives privately said they were shocked, and one who asked not to be identified called it a “nasty surprise.” Carriers are already grappling with shortages of pilots, air traffic controllers, and new planes, making it harder to add more flights. Some are leaning on bigger planes that can accommodate more passengers to get around operational challenges. “On the face of it, this came at a really awkward time,” said Addison Schonland, partner at consulting firm AirInsight.
Impact on Major Customers
Major customers that took delivery of affected A320neo jets include Spirit Airlines (SAVE.N), JetBlue Airways (JBLU.O), Hawaiian Airlines (HA.O), and Wizz Air (WIZZ.L), according to aviation data provider Cirium. Those carriers also lack in-house aircraft repair and maintenance support systems, making them reliant on outside service providers. But with repair facilities already congested, the situation is far more pressing for them, Schonland said.
Hawaiian Airlines warned it might have to adjust its capacity, but said it was too early to assess the impact. The carrier said on Tuesday the impact would depend on the availability of the parts that require replacement. The limited availability of replacements for these engines had already limited Hawaiian’s ability to make full use of its Airbus fleet. It had grounded some planes due to a lack of engines.
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Persistent Challenges for the Aviation Industry
The industry has struggled to build spare capacity amid a persistent shortage of labor after the pandemic and a faster-than-expected recovery in travel demand. Before the revelation of contaminated metal parts in Pratt & Whitney’s engines, Hawaiian had planned to have no more than two planes out of service for the next few months. Now it will likely take a few more quarters before its entire Airbus narrowbody fleet is available. “What we are really looking forward to is full availability of our fleet … and a much more predictable operation,” Hawaiian CEO Peter Ingram said on the company’s earnings call on Tuesday.
Spirit Airlines previously cut 2023 capacity estimates due to a lack of working GTF engines. The ultra-low-cost carrier has said constrained capacity at repair shops has led to a three-fold increase in turnaround times for engines. The Florida-based company, due to report its quarterly earnings next week, did not respond to a request for comment. In April, however, it said engine-related issues were hurting operations. Prior to the latest issue, Spirit’s Chief Financial Officer Scott Haralson had called the whole situation “frustrating” as it was hurting the airline’s profits.
JetBlue finds itself in a similar spot. A spokesperson said the New York-based carrier was working with Pratt to assess the impact of the latest problem. The airline already cut 10% of its flights out of New York City this summer due to a shortage of air traffic controllers. In a regulatory filing, the company previously warned it was “vulnerable to significant problems” associated with Pratt & Whitney’s GTF engines.
Hungary’s Wizz Air said on Wednesday it expected first-half capacity to shrink by a “mid-single digit” percentage as 12 of its fleet’s engines would be affected. But the low-cost carrier added that strong consumer travel demand could result in higher fares, leaving profitability intact.
Overall, the recent problems with Pratt & Whitney engines have sparked frustration among airline executives, who are already dealing with various operational challenges. The shortage of labor, including pilots and air traffic controllers, as well as the limited availability of new planes, has made it difficult for airlines to add additional flights. The engine contamination issue has added another layer of complexity, with major customers such as Spirit Airlines, JetBlue Airways, Hawaiian Airlines, and Wizz Air facing potential capacity adjustments.
Repair facilities are already congested, making it more challenging for airlines without in-house maintenance support systems. Hawaiian Airlines, for example, has been unable to fully utilize its Airbus fleet due to the limited availability of replacement engines. This comes at a time when the industry is working to recover from the impact of the pandemic and meet the surging demand for travel.
Spirit Airlines and JetBlue Airways have also faced significant difficulties due to engine-related issues. Turnaround times for engines have tripled at repair shops, impacting the operational efficiency and profitability of these carriers. JetBlue has already reduced its flights out of New York City due to a shortage of air traffic controllers, further highlighting the challenges faced by the industry.
While the situation presents obstacles for airlines, Wizz Air remains optimistic about its profitability despite expecting a decrease in capacity. The carrier anticipates higher fares due to strong consumer travel demand, offsetting the impact of the engine problems.
In conclusion, the recent problems with Pratt & Whitney engines have created additional headaches for the airline industry, exacerbating existing challenges. With limited spare capacity and a shortage of labor, airlines are grappling with the need to adjust capacity and manage operational complexities. Despite these setbacks, the industry remains hopeful for a full recovery and a more predictable operation in the future.
