Mexican low-cost carrier Volaris has reached an agreement with Pratt & Whitney (P&W) on inspections of its Geared Turbofan (GTF) engines. This development comes in the wake of Volaris revising its full-year capacity and earnings expectations due to additional inspections of its Pratt & Whitney GTF engines.
.gif)
The Impact of Engine Inspections
The company announced on October 10 that the full-year operating revenue will be around $3.2 billion, at the lower end of prior expectations. Capacity, as measured in available seat miles (ASMs), will rise 10% rather than the 13% it had forecast earlier. The company also now expects an EBITDAR margin for 2023 of about 26%, down from an earlier expectation of 29%-31%. "The accelerated inspection program will include engines in our fleet," says CEO Enrique Beltranena. "The Volaris team is actively executing plans to mitigate the engine inspection impact, including a project to optimize our route network. We anticipate our growth rate will slow while we work through the required engine shop visits."
The Reason Behind the Inspections
In July, RTX, the parent company of Pratt & Whitney, first disclosed that 1,200 of its next-generation turbofan engines would need to be returned to the company for inspections and partial disassembly. This was due to the discovery of microscopic contaminants in a powdered metal used in high-pressure turbine discs. These contaminants could lead to cracks in the engine.
The Way Forward
Despite the challenges posed by the engine inspections, Volaris remains Mexico's largest airline, registering a significant increase in passenger numbers for the first three-quarters of the year. The airline is actively working on plans to mitigate the impact of the engine inspections, including optimizing its route network. While the inspections have led to a revision in the company's earnings expectations, Volaris continues to modify its plans as more details emerge from P&W. The company was forced to lower its earnings expectations due to the continuing volatility in jet fuel prices and the effect on ASM production as it works through the engine issues and its projected impact on its network and profitability. In conclusion, the accord between Volaris and P&W on GTF motor inspections marks a significant development in the aviation industry. It underscores the importance of rigorous engine inspections for ensuring flight safety, even as it poses challenges for airlines in terms of operational adjustments and financial planning.
