**RTX to Ground Airbus A320neos for Quality Checks**
Aerospace supplier RTX announced on Monday that an average of 350 Airbus A320neos will be grounded through 2026. The company’s Pratt & Whitney engines unit will be removing the geared turbofan engines (GTF) for quality checks. The decision follows a materials defect that could lead to the cracking of certain engine components, which RTX first described in July.
**Estimated Financial Impact**
In response to the defect, RTX estimates it will pull 600 to 700 engines off jets for inspections and take a $3 billion charge in the third quarter. The company, formerly known as Raytheon, anticipates up to a $3.5 billion pre-tax hit to its profit over the next several years as a result of the problem. This issue has also forced RTX to lower its $9 billion free cash flow goal for 2025 to approximately $7.5 billion. It has also decreased its projected sales figure for 2023 by $5.5 billion.
**Impact on Airlines**
European low-cost airline Wizz Air said on Monday that its initial estimates indicate capacity could be reduced by 10% in the second half of 2024 as a result of the GTF issue. Repair work, which RTX CEO Greg Hayes initially expected would take 60 days, is now expected to last up to 300 days per engine, with the majority of engine removals occurring in 2023 and early 2024.
**Quality Issue Details**
The quality issue relates to a “rare condition” in the powder metal used to manufacture engine parts, such as high-pressure turbine disks and high-pressure compressor disks, that could result in micro-cracks and fatigue. During a production ramp up in 2015, a microscopic contaminant was introduced into the powdered metal made by RTX subsidiary HMI in Clayville, New York, which could not be detected by the company’s previous inspection methods, Hayes said.
**Response from RTX and Partners**
Hayes acknowledged on a call with investors that the problem “will have a significant impact on our customers,” with executives stating that the company will financially compensate impacted carriers. German partner MTU Aero Engines, which controls 18% of the GTF program, warned its own revenues and profit could be impacted this year, adding it was too early make a precise assessment. Airbus did not immediately respond to a request for comment.
**Implications for Other Models**
Pratt & Whitney is analyzing the impact of the quality issue on other engine models, but that impact is expected to be far less, RTX said. Hayes said the issue is not expected to result in additional inspections for the F-35 engine, which is also made by Pratt & Whitney.
Original Story at www.reuters.com – 2023-09-11 14:19:00
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