RTX hit with $3b charge from Pratt & Whitney aero engine recall
Hundreds of aircraft worldwide will be grounded over the next few years owing to problems with Pratt & Whitney engines, in a $3b hit to parent RTX and another setback for airlines already struggling to meet soaring post-pandemic travel demand. The US aerospace and defence group, formerly known as Raytheon, said P&W will recall 600-700 engines from 2023 to 2026, leading to the grounding of an average 350 aircraft a year. RTX said it would post a charge of up to about $3.5b in Q3, mostly owing to compensating its customers, and $1.5b less in free cash flow in 2025, a greater hit than it initially signalled in July. The Arlington, Virginia-based company now expects full-year sales of $67.5b to $68.5b compared to $67.1b in 2022. It had raised guidance in July for sales of between $73b and $74b. Shares in RTX, which have been declining since it disclosed the metal problem in July, were down almost 7% in morning trading in New York. The group said in July that contaminants in the powdered metal used to make its PW1100G-JM geared turbofan engines installed in Airbus aircraft meant that some of its engines would need to be inspected earlier than anticipated. The problem could cause cracks in the high-pressure turbine discs during manufacture and the company “found cracks that were larger than we had anticipated”, Chris Calio, the COO, told analysts on Monday. Greg Hayes, CE, described the disruption as “frustrating”, adding that it will “have a significant impact on our customers, on our partners and on RTX”. When each engine is removed from the wing of an A320neo narrow-body jet, it will take an average of between 250 and 300 days for the aeroplane to be returned to its airline. Calio warned that the engine inspections and any replacements “will create more congestion” in the company’s maintenance, repair and overhaul network, which have already delayed turnaround times because of problems getting materials.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2023-09-12/general/rtx-hit-with-3b-charge-from-pratt-whitney-aero-engine-recall
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RTX hit with $3b charge from Pratt & Whitney aero engine recall
Hundreds of aircraft worldwide will be grounded over the next few years owing to problems with Pratt & Whitney engines, in a $3b hit to parent RTX and another setback for airlines already struggling to meet soaring post-pandemic travel demand. The US aerospace and defence group, formerly known as Raytheon, said P&W will recall 600-700 engines from 2023 to 2026, leading to the grounding of an average 350 aircraft a year. RTX said it would post a charge of up to about $3.5b in Q3, mostly owing to compensating its customers, and $1.5b less in free cash flow in 2025, a greater hit than it initially signalled in July. The Arlington, Virginia-based company now expects full-year sales of $67.5b to $68.5b compared to $67.1b in 2022. It had raised guidance in July for sales of between $73b and $74b. Shares in RTX, which have been declining since it disclosed the metal problem in July, were down almost 7% in morning trading in New York. The group said in July that contaminants in the powdered metal used to make its PW1100G-JM geared turbofan engines installed in Airbus aircraft meant that some of its engines would need to be inspected earlier than anticipated. The problem could cause cracks in the high-pressure turbine discs during manufacture and the company “found cracks that were larger than we had anticipated”, Chris Calio, the COO, told analysts on Monday. Greg Hayes, CE, described the disruption as “frustrating”, adding that it will “have a significant impact on our customers, on our partners and on RTX”. When each engine is removed from the wing of an A320neo narrow-body jet, it will take an average of between 250 and 300 days for the aeroplane to be returned to its airline. Calio warned that the engine inspections and any replacements “will create more congestion” in the company’s maintenance, repair and overhaul network, which have already delayed turnaround times because of problems getting materials.<br/>
