Spirit Airlines (SAVE.N) on Thursday warned that its September quarter revenue will suffer as it is being forced to ground seven Airbus' (AIR.PA) A320neo jets through the end of the year due to a snag with RTX's (RTX.N) Pratt & Whitney Geared Turbofan (GTF) engines.
Spirit Chief Executive Officer Ted Christie said the grounding of seven aircraft will be on top of another seven that are currently out of service due to unscheduled removals of engines.
"This new issue is yet another frustrating and disappointing development," Christie said.
Pratt & Whitney's new engine issue adds to headache for carriers that are already grappling with shortages of pilots, air traffic controllers and new planes, making it harder to add more flights.
Spirit Airlines, which is the largest operator of GTF-powered NEO aircraft in the United States, previously cut 2023 capacity estimates due to unscheduled engine removals.
"Exposure to this issue is very unique and material for us and is having an impact on our margin," Christie said on an earnings call.
The Florida-based airline has cut its planned capacity in September by 5%. The latest GTF problem is also expected to hurt its efficiency as the company said it will likely be overstaffed and carry more pilots than required into the fourth quarter and early 2024.
Overall, various engine issues are estimated to shave off its revenue in the current quarter by about 7.5 percentage points. Spirit, however, said RTX has promised to compensate the airlines affected by the new engine issue.
Christie said Spirit has as many as 13 engines out of initial 200 identified by Pratt & Whitney for accelerated inspection. These will be out of service beginning next month.
While the timing for inspections of an additional 1,000 GTF engines is not yet known, 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, he said. The company already expects to have at least 10 NEO aircraft out of service during most of 2024 due to scheduled engine checks.
