A Pratt & Whitney PW1000G turbojet engine sits on the wing of an Airbus A320neo during a handover ceremony outside the Airbus Group SE factory in Hamburg, Germany, Friday, February 12, 2016.
Bloomberg | Krisztian Bocsi
Actions from RTX fell 14% on Tuesday after the aerospace giant said a manufacturing problem with some of its popular engines would require “expedited” inspections of about 200 jet engines.
The problem stems from the powdered metal used to make some engine components, RTX, the parent company of jet engine maker Pratt & Whitney, said during a quarterly earnings call. Engines currently in production are not affected, the company said.
RTX, formerly known as Raytheon Technologies, cut its cash flow outlook for the year by $500 million to $4.3 billion because of the issue.
“IIt’s going to be expensive,” RTX CEO Greg Hayes said during the earnings call. “We’re going to make airlines whole because of the disruption we’re going to cause them.”
The issue is the latest challenge for airlines dealing with delayed aircraft from manufacturers as carriers struggle to reap the benefits of a travel boom with limited aircraft available.
Pratt & Whitney said it also expects about 1,000 more engines to be removed from fleets over the next nine to 12 months. However, the company said it would continue to deliver new aircraft and parts.
The problem will affect some A320neos, a narrow-body aircraft and one of the most popular aircraft in the world. Competition with Boeing 737 Max.
The Federal Aviation Administration said it is aware of the issue and is in contact with Pratt & Whitney and affected airlines.
“The agency will ensure that appropriate action is taken,” the FAA said.
Delta Air Lines, a major Airbus customer, said it was looking into the issue. Airbus did not immediately comment.