Airline Chiefs Blast Engine Makers Over Delays

• United Airlines CEO called lack of engines the 'biggest constraint' for at least five years; LATAM Brasil has 12 planes grounded and Cathay Pacific's HK Express has half its A320 fleet grounded at any time
• IATA CEO noted engine makers have increased margins by double digits while airlines face $11 billion in added costs from supply-chain disruptions, calling out the 'paradox' in their contrasting financial performance
• Problems span multiple manufacturers including RTX's Pratt & Whitney (GTF engine issues affecting hundreds of A320neo aircraft), Rolls-Royce, and GE Aerospace, with airlines reporting higher-than-expected maintenance costs and reduced engine durability

Airline Chiefs Blast Engine Makers Over Delays

Key Issues:

Airline executives at the IATA Annual General Meeting in Rio de Janeiro intensified criticism of commercial jet engine manufacturers over persistent aircraft groundings and escalating maintenance costs expected to last for years.

Key Figures:

• $11 billion: Additional costs airlines have absorbed due to supply-chain disruptions
• 12 aircraft: LATAM Brasil has grounded due to engine issues
• Hundreds of A320neo planes grounded globally
• Nearly 20% of ITA Airways' fleet grounded
• 50% of HK Express's 10 Airbus A320s grounded at any time
• At least 5 years: Timeframe United Airlines CEO expects engine constraints to continue

Companies Implicated:

• Engine makers: RTX's Pratt & Whitney (GTF engine problems), Rolls-Royce, and GE Aerospace
• Airlines affected: United Airlines, LATAM Brasil, WestJet, Azul, ITA Airways, Cathay Pacific/HK Express
• Aircraft manufacturers: Airbus, Boeing

Main Complaints:

United CEO Scott Kirby identified engine shortages as "the biggest constraint" for at least five years, singling out Rolls-Royce for particular criticism. Airlines report unscheduled maintenance issues and lower-than-expected engine durability offsetting fuel savings. ITA Airways is considering legal action against RTX over GTF problems affecting Latin America expansion plans.

Market Implications:

IATA CEO Willie Walsh highlighted a troubling disconnect: engine makers have achieved double-digit margin growth while airlines shoulder $11 billion in additional costs. Engine manufacturers defend pricing as necessary for complex system development and support. The tight supply situation for engines and aircraft is expected to continue for at least two more years, constraining airline capacity and growth plans industry-wide.