Airlines brace for hit from Pratt & Whitney's new engine problem

Hawaiian Holdings

26/07/2023 22:49

By Rajesh Kumar Singh and Tim Hepher
       CHICAGO/PARIS, July 26 (Reuters) - Airline executives
are fuming about the prospect of grounding planes and trimming
flight capacity amid a busy summer travel season after fresh
problems arose with some of RTX's  RTX.N  Pratt & Whitney
engines.
        Pratt & Whitney's latest snag, revealed on Tuesday, will
impact at least 1,200 of its Geared Turbofan (GTF) engines that
power Airbus'  AIR.PA  popular A320neo jets and will need up to
60 days to inspect and fix after microscopic contaminants were
found in a metal used in part of the engine core.
    While few airlines commented publicly about the engine
contamination issue, multiple senior airline executives
privately said they were shocked, and one who asked not to be
identified called it a "nasty surprise."
    Carriers are already grappling with shortages of pilots, air
traffic controllers and new planes, making it harder to add more
flights. Some are leaning on bigger planes that can accommodate
more passengers to get around operational challenges.
    "On the face of it, this came at a really awkward time,"
said Addison Schonland, partner at consulting firm AirInsight.
    RTX said it was looking to minimize the impact and support
its customers, but airlines in the northern hemisphere are
trying to optimize resources for the summer travel season,
typically the industry's most profitable period.
    Major customers that took delivery of affected A320neo jets
include Spirit Airlines  SAVE.N , JetBlue Airways  JBLU.O ,
Hawaiian Airlines  HA.O  and Wizz Air  WIZZ.L , according to
aviation data provider Cirium.
    Those carriers also lack in-house aircraft repair and
maintenance support systems, making them reliant on outside
service providers. But with repair facilities already congested,
the situation is far more pressing for them, Schonland said.
    Hawaiian Airlines warned it might have to adjust its
capacity, but said it was too early to assess the impact. The 
carrier said on Tuesday the impact would depend on availability
of the parts that require replacement.
        The limited availability of replacements for these
engines had already limited Hawaiian's ability to make full use
of its Airbus fleet. It had grounded some planes due to lack of
engines.
    The industry has struggled to build spare capacity amid a
persistent shortage of labor after the pandemic and a
faster-than-expected recovery in travel demand.
    Before the revelation of contaminated metal parts in Pratt &
Whitney's engines, Hawaiian had planned to have no more than two
planes out of service for the next few months. Now it will
likely take a few more quarters before its entire Airbus
 AIR.PA  narrowbody fleet is available. 
    "What we are really looking forward to is full availability
of our fleet ... and a much more predictable operation,"
Hawaiian CEO Peter Ingram said on the company's earnings call on
Tuesday. 
    Spirit Airlines previously cut 2023 capacity estimates due
to a lack of working GTF engines. The ultra-low-cost carrier has
said constrained capacity at repair shops has led to a
three-fold increase in turnaround times for engines.
    The Florida-based company, due to report its quarterly
earnings next week, did not respond to a request for comment. In
April, however, it said engine-related issues were hurting
operations.
    Prior to the latest issue, Spirit's Chief Financial Officer
Scott Haralson had called the whole situation "frustrating", as
it was hurting the airline's profits.
    JetBlue finds itself in a similar spot. A spokesperson said
the New York-based carrier was working with Pratt to assess the
impact of the latest problem.
    The airline already cut 10% of its flights out of New York
City this summer due to a shortage of air traffic controllers.
In a regulatory filing, the company previously warned it was
"vulnerable to significant problems" associated with Pratt &
Whitney's GTF engines.
    Hungary's Wizz Air said on Wednesday it expected first-half
capacity to shrink by a "mid-single digit" percentage as 12 of
its fleet's engines would be affected. But the low-cost carrier
added that strong consumer travel demand could result in higher
fares, leaving profitability intact. 

 (Reporting by Rajesh Kumar Singh in Chicago and Tim Hepher in
Paris; Additional reporting by Valerie Insinna in Washington;
Editing by Ben Klayman and Jamie Freed)
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