Legal Dispute is brewing between Airbus and Pratt over Engine Deliveries

A legal dispute is brewing between Airbus and Pratt & Whitney. Airbus is calling on its contractual rights to force P&W to deliver the contracted number of Geared Turbofan engines for this year, Group CEO Guillaume Faury confirmed today during the FY25 results earnings presentation. Lower engine deliveries are slowing the projected ramp-up of A320neo family production, making the 2026 guidance of 870 deliveries rather provisional. Airbus openly blamed Pratt & Whitney in the earnings release: “On the A320 Family, Pratt & Whitney’s failure to commit to the number of engines ordered by Airbus is negatively impacting this year’s guidance and the ramp-up trajectory. As a consequence, the Company now expects to reach a rate of between 70 and 75 aircraft a month by the end of 2027, stabilising at rate 75 thereafter.” No agreement So what’s the problem? During a media roundtable ahead of the Dubai Airshow in November, at which the author was present, Pratt’s Rick Deurloo, SVP Commercial Engines, said there was still no agreement on 2026 deliveries. It includes both the PW1100G-JM version on the A320neo family and the PW1500G that powers the A220 family. “We are aligned with Airbus on deliveries this year (2025), and we are in conversations with them about 2026 and beyond. We have discussions with them ongoing.” This was followed by remarks from Christian Scherer in January, who, in his last media event before retiring, said Pratt & Whitney had not yet confirmed the 2026 numbers. During the FY25 earnings call on January 27, RTX CFO Neil Mitchill said large-engine deliveries would be up by mid- to high-single digits this year compared to 2025. “We talked at length for a number of years about the mix in the OE and balancing the need to support the flying fleet today, as well as installs at Airbus. We think we have put together a plan that does just that, so we will see continued growth on the MRO side that will support the GTF aircraft in particular. The rest will go between Airbus and spares. We will probably see growth in the installs and probably flattish in the spares deliveries for 2026.” CEO Chris Calio added that RTX has several investments on the line over the next 24 months to support growth. Challenges From today’s comments, it’s clear that Airbus is not happy at all about how P&W is balancing the mix of available new engines. During the media presentation, Faury acknowledged that Pratt is facing a number of challenges: “Pratt has the combined needs at the moment of serving production for new aircraft and serving the MRO capabilities for the recall campaign linked to the powder metal issue and linked to the rather low durability of the GTF engines. That puts stress on a number of bottlenecks, supply of certain parts, which are insufficient in numbers to serve both needs, and the MRO capability to retrofit all engines in service and reduce the number of aircraft on ground.” “We are very frustrated that they have decided to allocate more engines to the in-service fleet, to the detriment of Airbus. I think they should do more on increasing the capability to serve both needs at the same time.” These problems primarily manifest in 2026 but are likely to continue into 2027 as well. Faury said: “We continue to work with them and make them change their minds. We have a contract with our friends at Pratt & Whitney, and we see that they are not respecting their contractual obligations, so we want to enforce our rights. Indeed, we have initiated a process, calling on the contractual requirements of disputes. I will not say more about it, because it then becomes a commercial, unconfidential relationship with them, but I confirm we will enforce our contractual rights.” Question mark The uncertainty over how many engines Pratt & Whitney can deliver casts doubt on Airbus’s guidance of 870 deliveries this year. This number is already below Airbus's target, affecting free cash flow for 2026. If reached, this would mean a 10% improvement over the 793 deliveries last year, although they were reduced from the original 820 after a quality issue at a Spanish contractor was found on forward fuselage panels of the A320neo family. Airbus must rely on CFM to deliver on the around 15 percent increase in deliveries that GE Aerospace and Safran recently guided for 2026. In 2024 and early 2025, Airbus criticised CFM for not delivering the contracted numbers, but the issues at some suppliers seem to have been fully addressed. This resulted in record LEAP deliveries of 1.802 engines to Airbus, Boeing an COMAC. Asked if today’s guidance of 870 aircraft is provisional, Guillaume Faury replied: “We release the guidance with the information we have. Pratt & Whitney has honored the orders we placed, and they have accepted the volumes for 2026. We have to base our guidance on what they tell us now, what they are willing to commit to and deliver.” “We work hard to enforce our contractual rights, which we believe are not respected. If things change over the course of the year, we will take advantage of it. But we have to adjust the production trajectory to, at least at the beginning, maintain opportunities that create complexities in the ramp-up trajectory, in the level of inventories, because we have to take care of all the other suppliers which have delivered and continue to deliver on the ramp-up trajectory. We are also very much focusing on the 2027 volumes of P&W engines to be back on track if 2026 is not better than what we see today.” Rate 75 What’s evident today is that the rate 75/month is being "slightly" pushed further to the right. This target was originally planned for 2025, but was pushed to 2027 in July 2027. Airbus never said when exactly it intended to reach a rate of 75, but confirmed today that this will now be at the end of the year, before stabilising in 2028. Faury said that the ramp-up is not impacted by other supply issues, but by the Pratt problem. While not officially confirmed, Airbus produced around 62 A320neo family aircraft per month last year. The ramp-up of the A220 is also impacted by the P&W issue and by the additional time required to integrate the wing production site in Belfast into Airbus’s aerostructures business. Belfast is part of the work packages that Airbus acquired from Spirit AeroSystems in December. The A220 is now expected to reach a rate of 13/month in 2028. The original plan was to go to 14/month this year, but this was lowered to 12/month last autumn. Faury reiterated that the A330neo will reach 5 aircraft per month in 2029, and the A350 will reach 12 per month in 2028. The integration of Spirit’s fuselage production is a factor in this. The yellow highlight below reflects market reaction to today's news. [caption id="attachment_189299" align="aligncenter" width="580"] Current share price chart for Airbus[/caption]

US Flight Planner - US DoT On-Time Data	Airbus vs Boeing - Official OEM Data
US Airline Schedule Performance - US DoT Data	Daily OEM Production & Deliveries -

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