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April 23, 2024
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Should the market be concerned about P&W?

Yet another issue with the Pratt & Whitney GTF was reported last week.  Certainly, frustrating airlines and Airbus again. This time it’s the high-pressure compressor and the knife edge seal.

The pattern was detected in late January by some accounts, and by February 8, EASA issued an emergency airworthiness directive, requiring aircraft with both engines from the affected population of engines to be grounded. That number seems to be small – by P&W’s count, it was 11 aircraft. Aircraft with one engine from the affected population – 21 by P&W’s count – can continue to fly but not on ETOPS routes.  P&W started to work on the issue immediately – before the AD.  The AD came after the fourth case of an engine problem.

On any other engine on any other day, it would be have noted but not headline news outside of aviation media.  But this is the GTF, and after last year, everyone watches P&W very closely.  Deservedly so – their introduction of the first new engine architecture in 30 years warrants the kind monitoring they’ve been getting.

How are they handling this issue?

In answering this question, compare P&W’s handling of this issue with the handling of the #3 carbon seal last year.  Then the #3 carbon seal issue led to grounded aircraft, most notably in India, in summer last year. P&W was in reaction mode until the redesigned part was certified, at which point they seemed to take a more proactive approach to telling their story. It was a summer of pain – for their customers, for Airbus, and for P&W.

P&W has handled this issue differently – far more proactive, with more confidence and transparency, to their advantage. The number of engines worldwide in service affected by this HPC issue is 43 – on 32 aircraft, so the scope is significantly smaller and contained, unlike with the #3 seal issue. The mitigation plan is far more immediate than with the #3 seal, too. And most of all, P&W shared a more technical information through their official press releases than they have before.

The Leduc impact

This may be the first signs of what P&W President Bob Leduc calls his “cultural transformation” in action. Mr. Leduc came back to P&W after many years’ absence and, in his words, “didn’t recognize the place I once loved.” Decision making had been pulled up to the highest levels, people were afraid to communicate bad news, and the entire company seemed bloated and bureaucratic. It’s surprising the GTF comes from P&W, with the culture Leduc re-entered in 2016.  All trade media trying to get information out of the company over the past 24 months knows this.

Mr. Leduc realized there were issues needing attention: a majority of its engineering talent was going to retire in the next decade. Technology was reshaping the factory floor, changing the fundamental role of hourly workers. And he was facing a production ramp for the GTF and F135 programs that the company hadn’t seen since the 1980s, or arguably since the second world war.

Leadership shuffles, not just the heads of the major product lines, but throughout the organization were made. Mr. Leduc started doing more internal employee meetings, preaching the gospel of their mission, all revolving around the fact that every second of every day, someone somewhere depended on a P&W engine to get them where they needed to go.  Last year he championed a leadership course by the Thayer Leader Development Group, led by retired Army commanders who know about leading in a volatile environment.

Mr. Leduc’s work is far from done, but something seems to be catching on. He’s helped by the support from United Technologies, and the fact that while the GTF has had a series of issues, crucially none of these technical problems are related to the gear system itself. Plus, the engine is meeting and even exceeding performance promises for fuel efficiency and noise. It is only on the A320neo program that these issues have occurred.  Bombardier, Embraer, Mitsubishi, and IRKUT all seem pleased they chose the engine for their programs. Even Sukhoi is flirting with using it.  If the engine was fundamentally a risk, the OEMs other than Airbus would not be using it exclusively.

Our assessment

The GTF is sound, and the issues are irritating but ultimately solvable. We like the direction P&W is taking but they must “walk the talk.” They recommitted to meeting their 2018 production numbers, (after having met the production numbers in 2017) so time will tell, but for now, we think it’s appropriate to give them the benefit of the doubt. Remember how Boeing had an uphill battle with India-based 787s?  Boeing got through it.  So will P&W.

author avatar
Addison Schonland
Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.

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