Spirit Airlines warns of financial damage from grounded planes

Spirit Airlines has issued a warning regarding its September quarter revenue. The airline will be forced to ground seven Airbus A320neo jets through the end of the year due to a snag with RTX's Pratt & Whitney Geared Turbofan (GTF) engines. RTX recently discovered a "rare condition" in powdered metal, and over 1,200 of the 3,000 engines built for the twin-engined Airbus A320neo between 2015 and 2021 must be taken off and inspected for micro-cracks that would indicate fatigue. 


Spirit CEO Ted Christie stated that the grounding of seven aircraft will occur in addition to another seven that are currently out of service due to unscheduled engine removals. "This new issue is yet another frustrating and disappointing development," said Christie. Carriers are already facing a shortage of pilots, air traffic controllers, and new planes, making it difficult to add more flights. 

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The latest GTF problem will affect the efficiency of Spirit Airlines and will likely result in the company being overstaffed and carrying more pilots than required into the fourth quarter and early 2024. Spirit Airlines has cut its planned capacity in September by 5%. The airline previously reduced its 2023 capacity estimates due to unscheduled engine removals. Christie said that the various engine issues are expected to decrease its revenue in the current quarter by around 7.5 percentage points. 

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However, RTX has promised to compensate the affected airlines for the new engine issue. Spirit Airlines has as many as 13 engines out of the initial 200 identified by Pratt & Whitney for accelerated inspection, and these will be out of service beginning next month. The timing for inspections of an additional 1,000 GTF engines is not yet known, but Christie said they will likely need to be performed before the end of September 2024. By the end of next month, Spirit expects to find out if more of its engines will require removals for inspection. The company already expects to have at least 10 NEO aircraft out of service during most of 2024 due to scheduled engine checks.

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