Airbus seeks Pratt & Whitney damages over engine delays, sources say
The move follows a months-long dispute between the world’s largest jet maker and its RTX subsidiary over who would have priority access to scarce engine materials: aircraft assembly lines or airlines already facing long repair queues.
Pratt & Whitney’s Geared Turbofan engines power at least 40% of the A320neo family, the best-selling Airbus model, and compete for airline contracts with CFM International’s LEAP engine.
Hundreds of narrow-body jets have been partially grounded due to long wait times for engine inspections and repairs following a production problem at Pratt & Whitney, putting pressure on engine supplies for aircraft production.
The conflict highlights a broader tug of war over supplies of engines and parts that have been scarce since the pandemic.
AIRBUS SHAVED OUTPUT TARGETS
Airbus accused the RTX unit of backtracking on the number of engines allocated to jet factories and cited shortcomings in its recent decision to reduce production targets. Pratt said he is working closely with Airbus as it searches for the right balance for airlines trying to keep their existing jets flying. Airbus CEO Guillaume Faury said last month that the planemaker was ready to enforce its contractual rights, setting the timing for possible legal action.
The dispute triggered a claim that, if successful, could lead to unspecified damages, said the sources, who asked not to be named because of the sensitivity of the discussions.
The forum for the dispute could not immediately be determined, but most cross-border commercial claims in aerospace are handled behind closed doors in arbitration proceedings.
An Airbus spokesman said the company had nothing to add to Faury’s comments at last month’s results presentation.
An RTX spokesperson had no immediate comment.
HOOKATION BETWEEN PLANNERS AND AIRLINES
The dispute goes to the heart of the fraying three-way relationship between aircraft manufacturers, engine suppliers and airlines over how engines and parts are allocated.
As the pandemic disrupts supply chains, engine manufacturers must balance deliveries of new aircraft against repair demands from airlines to keep their fleets flying.
Airbus alleges that Pratt & Whitney overpromised engine shipments and diverted engines to repair shops from which engine manufacturers derive most of their revenue.
The move risks putting the planemaker at odds with some of its own airline customers, after Lufthansa’s CEO defended Pratt by saying carriers should have priority.
RTX CEO Chris Calio told analysts in January that Pratt & Whitney needed to find the right balance, adding that overall deliveries were up 50% last year.
Tensions between aircraft manufacturers and engine suppliers due to supply constraints and rising parts prices across the industry are not new.
But the dispute with Pratt & Whitney is shaping up to be one of the biggest tests of industry cohesion since Airbus’s court dispute with Qatar Airways over its A350 jets in 2022.
This comes as Airbus and Boeing examine engine options for next-generation jets; but in practice, most disputes are resolved in a shorter time frame than the development decisions that shape partnerships over decades.
Still, major disputes remain rare in an industry dominated by two aircraft manufacturers and a handful of major engine suppliers.
Meanwhile, Airbus has been under pressure on its own production network, having cut delivery targets late last year due to supply problems with fuselage panels from a Spanish company.
