Market Overview

Pratt & Whitney Offers Spare Engines To Grounded Indigo Jets


Pratt & Whitney, one of the operating segments of diversified conglomerate United Technologies Corporation (NYSE: UTX), according to a Reuters article, has come to the rescue of Indigo Airlines — the biggest carrier in India by market share — by offering spare engines for its grounded jets. The strategic initiative is likely to provide some respite to the beleaguered airlines firm that was forced to cancel about 35-45 flights a day due to technical snag of the engines.

The problem stemmed from a series of in-flight engine failures related to the Airbus A320neo aircrafts that use Pratt & Whitney PW1100G engines. The issue was with a knife-edge seal in the high-pressure compressor aft hub on the engine, causing vibrations and three in-service shutdowns. This forced the Directorate General of Civil Aviation (DGCA) — the regulatory body of India in the field of civil aviation, primarily dealing with safety issues — to ground 11 aircraft fitted with such engines, eight of which belonged to Indigo.

Pratt & Whitney has faced recurring problems with these engines that led to repeated grounding of jets in India. In last July, Indigo was forced to take seven aircrafts out of action due to engine failures, while DGCA grounded three more jets in February 2018. Although Pratt & Whitney replaced the original seal in an effort to reduce the planned service interval due to higher degradation, the problem failed to subside.

In order to address the current grounding of flights, Pratt & Whitney has reportedly decided to deliver two spare engines today and the remaining within the next 40 days. It is yet to be seen if the company can come up with a permanent solution to fix the issues with these engines of Airbus narrow-body planes.

Industry observers widely expected Pratt & Whitney engine business to be the profit driver for its parent firm, United Technologies. However, the engines have failed to live up to the expectations and the business seems to be a drag on overall earnings. Nevertheless, United Technologies has outperformed the industry with an average loss of 0.1% in the last three months compared with a decline of 5.8% for the latter.

Despite the current setbacks, the PW1100 engines have proven its mettle in the industry. It has been able to meet the strict quality standards relating to burn, noise and emissions. The engine has the ability to reduce engine fuel consumption by 15% and regulate noise footprint by 50%.

Pratt & Whitney is among the world's leading suppliers of aircraft engines to the commercial, military, business jet and general aviation markets. Its Global Services provide maintenance, repair and overhaul services, including the sale of spare parts and fleet management services for large commercial engines.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: contributor contributorsNews


Related Articles (UTX)

View Comments and Join the Discussion!

Wall Street Braces For A Rate Hike: Who Wins, Who Loses

Upcoming Earnings: Athletic Giant Nike Gears Up To Report