Delta Air Lines (DAL.N) said it expects a limited impact from RTX’s (RTX.N) Pratt & Whitney engine quality difficulties soon but has yet to assess the impact properly. Delta’s finance chief, Dan Janki, told a Morgan Stanley conference that Pratt & Whitney will provide a more complete assessment at the end of the month.
RTX announced this week that it would remove 600 to 700 Pratt & Whitney Geared Turbofan (GTF) engines from Airbus A320neo jets for three years of quality assessments.
Due to a powder metal flaw, some Pratt & Whitney engine components cracked. RTX predicted engine repair work would take 60 days, but now it could take 300.
Janki stated, “I think (it) will be minimal at this point, but we got to assess it.”
“In a fragile supply chain, you must consider secondary impacts like new deliveries and other knock-on effects.”
Janki said Delta received Airbus A321neos “later in the cycle” and will conclude 2023 with a little around 50.
The carrier’s shares dipped roughly 1% after surging over 2% before the bell.
The airline improved its current-quarter revenue prediction earlier in the day as Americans’ desire to go to Europe boosted transatlantic flight demand. The airline forecasts a third-quarter revenue increase of 11% to 14%.
As Russia and Saudi Arabia decreased oil output, the airline’s fuel costs rose, lowering its quarterly operating margin and profit predictions.
The carrier now estimates a third-quarter profit of $1.85 to $2.05 per share, down from $2.20 to $2.50.
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