RTX to recognize Q3 charge of $3B due to Pratt & Whitney issue

RTX is providing an update on the impact to the Pratt & Whitney GTF fleet arising from the previously disclosed rare condition in powder metal used to manufacture certain engine parts. “As a result of recent updates to this matter, RTX will recognize a third quarter charge which will impact reported sales and earnings for the year. In connection with the previously disclosed rare condition in powder metal, fleet management plan developed for PW1100 GTF engines, which power the A320neo. Approximately 600 to 700 engines will be removed for shop visits between 2023 and 2026 beyond Pratt & Whitney’s shop visit forecast entering 2023. A majority of the incremental engine removals required by the fleet management plan will occur in 2023 and early 2024. The accelerated removals and incremental shop visits will result in higher aircraft on ground. Adding maintenance capacity, increasing part output and taking other action to mitigate impact to PW1100 GTF fleet 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. RTX pre-tax operating profit impact is estimated to be between $3B and $3.5B over the next several years, inclusive of an approximately $3B pre-tax charge in Q3, after partners’ share of charges,” the company stated.