Airlines, suppliers set to take a hit from RTX's jet engine issues
September 12, 2023 at 01:58 pm EDT
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Sept 12 (Reuters) - Airlines and aerospace suppliers are
expected to take a hit after RTX Corp said on Monday
600-700 engines on Airbus A320neo jets need to be inspected for
quality issues, which could ground hundreds of aircraft through
2026.
In July, RTX said microscopic contaminants were found in a
powdered metal used in high-pressure turbine discs that are part
of the Pratt & Whitney Geared Turbofan (GTF) engine's core. The
presence of those contaminants could lead to cracks in the
engine.
The following airlines and aerospace suppliers expect to be
affected:
Air New Zealand The company said the issue would further
reduce engine availability and have a
"significant" impact on its flight
schedule from January 2024. The airline
has 16 A320neo jets in its fleet.
Singapore The inspections would affect four of the
Airlines' engines that power Scoot's A320neo fleet
Scoot and could force it to adjust some of its
flights.
Wizz Air The Hungarian carrier estimated a
potential 10% capacity reduction in the
second half of fiscal 2024.
IHI Corp The Japanese firm expects an earnings
hit from the lengthy inspections.
Kawasaki Heavy The component manufacturer expects an
Industries impact on its earnings from the jet
inspections.
Melrose The GKN Aerospace owner said it faces a
Industries potential hit of around 200 million
pounds ($249.54 million) over the period
to 2026.
MTU Aero MTU, which has an 18% share in the GTF
Engines engines program, said inspections could
result in a hit to revenue and reported
EBIT of around 1 billion euros ($1.07
billion) in 2023.
($1 = 0.8015 pounds)
($1 = 0.9317 euros)
(Compiled by Pratyush Thakur in Bengaluru; Edited by Shounak
Dasgupta)
RTX Corporation (formerly Raytheon Technologies Corporation) is among the world's leading aeronautics and defense groups. Net sales (including intragroup) break down by sector of activity as follows:
- aerial navigation systems (29.3%; Collins Aerospace): manufacturing of electrical, electronical and mechanical systems for aircrafts (compressors, airplane control, etc.), civil and military helicopters, etc.;
- aeronautics (29.2%; Pratt & Whitney): design and manufacturing of civil and military aircraft engines, gas turbines, rocket engines and propulsion systems;
- missile systems, and integrated air and anti-missile defense systems (21.1%; Raytheon Missiles & Defense): design and manufacturing of weapons systems, missiles, munitions, projectiles, radars systems, control and monitoring equipment, communication, information, detection and imaging systems, etc. ;
- aerospace systems (20.4%; Raytheon Intelligence & Space): production of radars, airborne sensors, tactical airborne communications systems, software-defined radio solutions, advanced tactical networking systems, cryptographic systems, real-time sensor networking systems, etc.
Net sales break down by source of revenue between sales of products (76.7%) and services (24.3%).
Net sales are distributed geographically as follows: the United States (86.3%), Europe (5.8%), Asia/Pacific (2.7%), North Africa and Middle East (0.2%) and other (5%).
RTX CORPORATION 
