Aerospace supplier RTX estimates pulling 600 to 700 engines off jets for inspections due to a materials defect, leading to a reduction in capacity for Airbus and a $3 billion charge in the third quarter, with repair work expected to last up to 300 days per engine.
RTX stock falls as the aerospace company updates investors on the costly repairs needed for Airbus A320 jet engines.
Despite positive earnings and increased guidance, the stock of aerospace and defense company RTX Corporation (NYSE: RTX) has been underperforming, facing technical risks and potential downgrades that pose a threat in the near term.
Shares in RTX Corp, the parent company of Pratt & Whitney, plummeted to a two-year low as the company revealed it would ground hundreds of Airbus jets over the next few years to address a rare manufacturing flaw, projecting that an average of 350 jets per year could be grounded through 2026 and estimating a $3 billion charge and $6-7 billion in gross costs to rectify the issue.
Aerospace suppliers and airlines are warning of rising costs and a squeeze on plane capacity after RTX disclosed that a rare manufacturing flaw could ground hundreds of Airbus jets in the coming years.
Delta Air Lines expects a minimal near-term impact from the quality issues with RTX's Pratt & Whitney engines but is still assessing the full impact, as RTX is set to pull 600 to 700 engines for quality inspections.
