Volaris has published revised projections for the first quarter of 2024 and the full year, anticipating a significant decrease in available seat miles (ASM). The airline forecasts investments of approximately USD 300 million, targeting a margin of between 31% and 33%. Additionally, Volaris expects aircraft fuel prices to range between USD 2.50 and 2.60 per gallon.
In a public announcement on December 5, 2023, Volaris revealed substantial issues with Pratt & Whitney’s GTF engines installed in their Airbus A320neo and A321neo aircraft. The problems forced the airline to ground 17 planes during a significant part of the summer season for thorough inspections.
The challenges posed by the Pratt & Whitney GTF engine issues are expected to result in a 16% to 18% decrease in Volaris’s ASM in 2024. To manage costs, the airline also laid off 200 employees. The grounding of aircraft and the subsequent capacity reduction have hindered Volaris’s growth potential compared to previous years.
As a consequence of the engine issues, Volaris reported a net loss of USD 39 million during the third quarter of 2023, a significant change from the USD 40 million profit recorded in the same period the previous year. This financial setback highlights the severity of the challenges faced by the Mexican low-cost airline.
See Also: The FAA issues inspection alert for some Pratt & Whitney PW1000G engines
Crisis in Pratt & Whitney for the A220, E2 and A320neo
Following new issues with the PW1000G engines, an additional inspection has been ordered on Pratt & Whitney’s equipment. Airlines, as users of the affected engines, will have to perform inspections that could take a month per aircraft.
The defect originates from the powdered metal used in manufacturing specific engine components. RTX, the parent company of the engine manufacturer, clarified that engines currently in production are not affected by this issue.
The problem particularly affects the Airbus A320neo, a narrow-body aircraft, and one of the most requested planes in the world. Pratt & Whitney has anticipated that nearly 1,000 more engines will need to be removed from airline fleets for inspections over the next nine to twelve months.
See Also: Volaris transported 33 million passengers in 2023 and faces the challenge of Pratt & Whitney engines
Volaris’s leadership is at risk due to GTF engine problems
Precisely, in a domestic market that has maintained resilience post-COVID-19 health crisis and the restoration of Category 1 status in the International Aviation Safety Assessment (IASA) by the United States Federal Aviation Administration (FAA), which allows it to increase its presence in the neighboring northern country.
In 2023, Volaris transported 33.49 million passengers, which represents a 7.9% increase compared to the same period in 2022. The breakdown of domestic and international markets revealed modest growth of 3.5% in the former and substantial growth of 26.3% in the latter.
Compared to 2019, the airline transported over 11 million additional passengers, representing a significant increase of 52.4%. According to the Mexican Civil Aviation Authority (AFAC), Volaris maintained its position as the leading airline in passenger movement in Mexico.
