Spirit Airlines could be in line for compensation ranging between $150 to $200 million due to issues with the PW1000G engine family from Pratt & Whitney.
Pratt & Whitney reported manufacturing issues with their GTF engines earlier in 2023. Globally, approximately between 600 and 700 engines are scheduled for early inspections. According to the manufacturer, they managed to identify the problem, which traces back to contamination in the powdered metal used for manufacturing certain components. Over time, this could lead to cracks in the rotating assembly.
GTF engines are among those used in the Airbus A320neo family of aircraft. The other option is provided by CFM with its Leap-1A engine. Pratt & Whitney estimated that an average of 350 A320 family aircraft would remain grounded each year until 2026. Spirit, in particular, is becoming one of the most affected by engine inspections and expects to ground 40 aircraft. This situation has forced the airline to cancel several routes.
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The company stated that «in January 2024, it had an average of thirteen neos grounded. It also estimated that this number will increase to around 40 by December 2024, with an average of around 25 aircraft grounded throughout the year.»
Spirit announced that, as a result of these problems, it has reached an agreement with Pratt & Whitney under which it will receive a monthly credit throughout the year to compensate for the grounded aircraft. If the problems persist beyond the current year, the agreement will be renegotiated.
The timing couldn’t be better: Spirit has struggled to turn a profit since the pandemic and currently has a debt of $1.1 billion due in 2025. Such is the airline’s situation that it recently had to conduct a sale and leaseback (selling planes to immediately lease them back) of 25 aircraft as a source of liquidity.
