NEW YORK, Sept 11, 2023 (AFP) – RTX, parent company of aerospace manufacturer Pratt & Whitney, said Monday that its profit could take a hit of up to $3.5 billion over the removal of hundreds of engines powering Airbus A320neo jets as it conducts quality checks.
The aviation and defense giant RTX, formerly known as Raytheon, added in a statement that about 600 to 700 engines will be removed for inspection over three years.
The issue, which was earlier disclosed, involves the powder metal used to manufacture certain parts.
Company officials previously described the problem as one of quality control, stressing that there was no immediate danger to flight safety.
The impact on pre-tax operating profit, however, is expected to be between $3 billion and $3.5 billion in the coming years, RTX said on Monday.
This includes an approximately $3 billion charge in the third quarter, the company added.
Meanwhile, accelerated removals will result in more aircraft being grounded.
“Pratt & Whitney 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,” the company said.
RTX chief executive Greg Hayes added: “We are focused on addressing the challenges arising from the powder metal manufacturing issue.”
“At the same time, we recognize this is an extremely difficult situation for our customers, and we are proactively taking steps to support and mitigate the operational impact to them,” he said.
RTX chief financial officer Neil Mitchill stressed that “the financial position of RTX remains strong” even as charges relating to the powder metal issue “reflect the impact” of the problem.
The firm also said it expects a cash impact of around $1.5 billion during 2025.
RTX shares slumped around five percent in early trading.
