RTX suffers loss due to a metal powder quality crisis affecting engines

By Apurva Minchekar  / October 24, 2023

RTX (formerly Raytheon Technologies) reported a 21% drop in sales compared to the previous year due to a metal powder quality crisis that led to engine failure of the V2500 engine fleet, the company said in its third-quarter earnings statement today.

In July, RTX said that in 2020, its business unit, Pratt & Whitney, located a rare condition in the metal powder used to manufacture certain engines that needed immediate inspections.

The company at the time also added that it suspects the contamination occurred between late 2015 and late 2020 and will be inspecting turbines and the entire fleet of products that were manufactured during this timeframe.

RTX Chairman Gregory Hayes today during an earnings call said, “Through the early stages of removals and inspections of the PW1100 engine which powers the [Airbus] A320neo aircraft, our outlook both financially and operationally remains consistent with our expectations.”

Hayes added that the company has made some major progress on the safety assessment of other Pratt & Whitney engine fleet that supports commercial aircraft, including the PW1500, which powers the Airbus A220; the PW1900, which powers the Embraer E2 and the V2500, which powers the A320.

“With the analysis substantially complete, we do not expect any significant incremental financial impact as a result of those fleet management plans,” Hayes said.

Christopher Calio, RTX president and chief operating officer, added that the company will reduce the life limits of the PW1500 engine and PW1900 engine on certain early configuration parts.

The company also plans to accelerate certain inspection processes from the fleet management and inspection plan designed for the V2500 engine in 2021, which will result in a total of roughly 100 or fewer incremental engine removals stretched out over the next four years.

While Pratt & Whitney also provides F135 engines to the U.S. military for F-35 fighter jets, the F-35 Joint Program Office in July told Air & Space Forces Magazine that the risk of defective metal powder in F-135 engines is low and the F-35 enterprise has also taken significant steps to eliminate the risk.

The program office also said it has been made aware of contamination since 2021 and has removed suspected contaminants from the manufacturing process in September 2021.

“We’ve had zero F135 maintenance issues related to powdered nickel contaminants. Our military customers are aware that we monitor for it, and they are fully aligned with our mature safety protocols and mitigation plans, which we will continue to update as required,” Pratt & Whitney told Air & Space Forces Magazine.

Additionally, RTX also highlighted its new bookings during the quarter that equal $75 billion.

Some of the Raytheon business unit bookings include $1.9 billion for classified bookings; $412 million for Next-Generation Short-Range Interceptor development; $383 million for HAWK and Patriot sustainment; and $297 million for Ukraine NASAMS production.

At the same time, Pratt & Whitney business unit booking includes $1.1 billion for F-135 engine sustainment and $616 million for F-135 engine production.