Hundreds of Airbus aircraft have to go to the workshop

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Airbus A320neo: A powder causes problems

Photo: Guillaume Horcajuelo/epa/dpa

Problems with Pratt & Whitney and MTU engines will force hundreds of Airbus jets to take a break over the next few years. 600 to 700 engines of medium-haul aircraft of the A320neo model family are affected. They will also have to undergo maintenance in the period from 2024 to 2026, as Pratt & Whitney parent RTX and Munich-based engine manufacturer MTU announced on Monday in East Hartford and Munich. Both companies are preparing for billions of dollars in charges. MTU made its own revenue and profit forecast for 2023 subject to reservations.

The news was poorly received on the stock market. MTU shares, the biggest loser in the Dax, lost more than eleven percent of their value in the afternoon. Since the turn of the year, the paper has lost a good eight percent. RTX shares, which had already been battered earlier, fell by almost seven percent on Monday. Since the turn of the year, the share price has fallen by 23 percent. Airbus shares, on the other hand, lost only about one percent and have still gained a fifth in value since the turn of the year.

Billions of dollars in burden

Pratt & Whitney and MTU announced the shortage of materials at the end of July. There was talk that a total of about 1200 so-called geared turbofan engines of the affected type PW-1100G-JM would have to be inspected due to the lack of material. 200 of them were to be taken out of service by mid-September. The manufacturers also wanted to check which drives could be inspected during an upcoming check. RTX and MTU now estimate that about 2024 aircraft will have to be grounded unscheduled due to inspections between 2026 and 350.

While Pratt & Whitney expects a financial burden of 3 to 3.5 billion US dollars for its part of the business in the coming years, MTU is already preparing for a negative impact of 2023 billion euros on revenues and earnings before interest and taxes (EBIT) for 1.

By way of comparison, MTU's Board of Management is currently targeting revenues of EUR 2023.6 billion to EUR 1.6 billion and earnings before interest and taxes (adjusted EBIT) adjusted for non-recurring items of more than EUR 3 million for 800. This would be a record result for MTU. Should the special burden due to the shortage of materials and the inspections reach the aforementioned billion euros, the planned operating profit from day-to-day business would be more than eaten up. The burden on liquidity, on the other hand, is likely to arise only in the coming years, MTU said.

According to earlier data, the shortage of material is due to a rare defect in the composition of a metal powder that Pratt & Whitney used to alloy the metal for turbine discs. According to earlier statements by the Board of Management, MTU itself did not use this powder.

The Munich-based manufacturer has an 18 percent stake in the engine model. It also operates one of three final assembly lines for the engine type, which is used on about one in two Airbus medium-haul jets in the A320neo model family. The other Airbus aircraft in this series are powered by engines from the French-American manufacturer CFM, a joint venture between Safran and General Electric. The A320neo jets and their longer variant, the A321neo, are Airbus' best sellers.

mik/dpa-AFX