Viva Aerobus confirmed that reached a compensation agreement with Pratt & Whitney regarding the ongoing issues with its Airbus A320neo family PW1000G engines, which forced the airline to ground a significant portion of its fleet. The information emerged during the presentation of the second quarter operating results, but no official announcement was made regarding the total compensation amount.
The crisis caused by recurring Pratt & Whitney engine failures forced operators to ground much of their Airbus A320neo family fleet. Viva Aerobus had to ground 28% of its fleet (24 aircraft: 12 A320neo and 12 A321neo) to subject these engines to a thorough inspection by the manufacturer to address design flaws.
During the presentation of the financial results, Viva Aerobus confirmed that within the $530 million the company reports as operating expenses in the second quarter, a portion includes compensation received for the reliability issues with the Pratt & Whitney GTF engines. Despite a 36% expense increase, the period showed a moderate net profit of $34 million.
“Total Operating Expenses increased by 36.0%, to $530 million. This increase was mainly driven by a 12.6% increase in ASMs, higher costs related to grounded aircraft, including short-term leases (ACMIs) to maintain capacity, and an adverse exchange rate effect due to the appreciation of the Mexican peso against the US dollar, as well as higher fuel prices and inflationary pressures” the company said in a statement.
“P&W engine inspections continue to pressure the global industry and our operations, affecting our utilization levels, operational efficiency, and unit costs. Although our capacity mitigation strategies have minimized disruptions, our unit costs have temporarily increased. On the positive side, we successfully concluded negotiations with P&W in the second half of Q2 2024, so our financial results reflect a portion of the compensation,” said Juan Carlos Zuazua, CEO of the company, during the presentation.
The airline incorporated aircraft leased from Avion Express Malta under an ACMI (aircraft, crew, maintenance, and insurance) contract to compensate for the absence of the grounded A320 and A321 NEOs. Although this measure was not accepted by the unions, which expressed their dissatisfaction, the company said it avoided layoffs or furloughs.
Viva Aerobus Fleet
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- 46 Airbus A320ceo (21 belong to Avion Express Malta)
- 22 Airbus A320neo (12 grounded)
- 10 Airbus A321ceo
- 28 Airbus A321neo (12 grounded)
