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May 26, 2024
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RTX provided an update on the GTF issue. RTX expects the issue to cost $3-3.5bn, with a $3bn charge booked in 3Q23 (P&W has a 51% share). Pratt & Whitney (P&W) sees 600-700 engines coming in for accelerated shop visits in 2023-26. Most of these are expected to occur by mid-2024, resulting in higher aircraft on ground problems. RTX also cut its 2025 cashflow guidance by $1.5bn to $7.5bn, reflecting the impact of the GTF problem.

The RTX team on the call is confident they have a handle on the scope of the issues. There is also a recognition the GTF has faced challenges since EIS. This focuses on the A320neo family with accelerated inspections on the 1100G. New engine deliveries will go as planned because these engines do not require the same inspections.  The other GTF models are expected to be reported on soon but fit within the planned time frame for the 1100G.

Pratt’s GTF Fleet Update

  • In connection with the previously disclosed rare condition in powder metal, a fleet management plan was developed for PW1100 GTF engines, which power the A320neo.
  • Approximately 600 to 700 engines will be removed for shop visits between 2023 and 2026 beyond Pratt & Whitney’s shop visit forecast entering 2023.
  • Most of the incremental engine removals required by the fleet management plan will occur in 2023 and early 2024.
  • The accelerated removals and incremental shop visits will result in higher aircraft-on-ground
  • Adding maintenance capacity, increasing part output, and taking other actions to mitigate the impact to the PW1100 GTF fleet.
  • P&W is analyzing the impact of powder metal on other engine models within its fleet, and other engine models currently are expected to be far less impacted.
  • RTX pre-tax operating profit impact is estimated to be between $3 billion and $3.5 billion over the next several years, including an approximately $3 billion pre-tax charge in Q3, after partners’ share of charges.

A big challenge will be to go through all the engines and identify those with disks without an “angle scan.”  Those engines coming in for regular MRO will be inspected and disks replaced as needed. P&W says they track each disk in the fleet.  

Ron Epstein (Bank of America) asked a crucial question about lessons learned and how this problem will not happen again. The answer is that P&W could not “see” the contamination. The issue is a “microscopic occlusion”.  The angle scan solves the problem because the earlier scan was “north-south.”   P&W has been making powered materials for over 50 years and no powder is contamination-free.  The problem was discovered because commercial engines, specifically the GTF, operate differently than their other engines, i.e., military. Only the V2500 faced a similar issue with contamination within P&W.

The most important outcome from today’s call is for RTX to message that the problem is identified and defined. The GTF hiccups surely unsettle customers, starting with Qatar Airways and on through IndiGo, who have defected.  P&W has some very big brands that remain loyal, Delta and United being the most obvious.  Notice airlines struggling the most with the GTF issues are those with no in-house MRO.

P&W’s tagline is “Dependable Engines.”  The GTF tested that tagline like no other engine.  RTX’s leadership frustration is palpable.  The team remains loyal to the GTF design and points out the engine has “decades” to service ahead, along with continuing refinements for newer versions.

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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