At a recent aerospace industry gathering, John Leahy, the chief salesman for Airbus Group SE, went on about a futuristic airplane with an engine that he said "no doubt will be delivered late."
While the audience was amused, Pratt & Whitney surely wasn't. It's spent $10 billion and decades developing a quieter, more-efficient and less-polluting jet engine. Executives see the product as critical to catching up to rival General Electric Co. in the market to power narrow-body or single-aisle planes, the dominant aircraft used by airlines around the world.
Instead, the engine's debut has been marred by production delays, technical issues and supply-chain foul-ups. Qatar Airways last week cited the problems while announcing plans to buy planes powered exclusively by GE turbines. Pratt & Whitney was forced to cut promised deliveries this year by 25 percent, frustrating some airlines and plane manufacturers counting on them. The troubles have dinged the stock of parent United Technologies Corp., as Pratt & Whitney's $14 billion in sales accounts for about one-quarter of United Technologies' revenue.
"This is their big play to get back on [single-aisle planes]," said Cai Von Rumohr, an analyst at Cowen & Co. "This is the one that's going to have to happen if they're going to be a player in large commercial engines."
The company has characterized the production issues as "teething" problems typical to new technology. President Bob Leduc told Bloomberg in June that complaints were overblown, saying the engines in service have been reliable while meeting promises of 16 percent better fuel efficiency, 75 percent noise reduction and 50 percent fewer emissions.
"The engine is as we advertised, period," he said. Pratt & Whitney has about 8,200 orders for the product.
Founded in 1925, Pratt & Whitney supplied engines to early planes and later for fighters in World War II. In the 1970s Pratt & Whitney was the leader in selling engines for large passenger planes. But its position slipped behind GE in the 1980s.
By the end of that decade, Pratt & Whitney engineers began work on technology to slow the engine's fan speed, which cuts noise and can improve efficiency. This year, the new engine, known as a geared turbofan, debuted in commercial service on the 180-seat Airbus A320neo -- the "neo" standing for "new engine option."
But production issues led Pratt & Whitney to revise its delivery schedule. Last month it said it would deliver only 150 engines this year, to plane manufacturers such as Airbus and Bombardier Inc., down from the 200 it had earlier pledged.
One of the sharpest blows cameOn Oct. 7, Qatar Airways made good on a threat to buy competitors to the A320neo over concerns about the delays. Chief Executive Officer Akbar Al Baker, a vocal critic of Pratt & Whitney's engine issues, said his carrier would order as many as 100 Boeing Co. 737 Max jets to "mitigate our risk" on the Airbus plane. He stressed the reliability of Boeing's jet, which use engines from CFM International, a joint venture of GE and France's Safran SA.
Pratt & Whitney's delays have forced Airbus to alter its delivery schedule, substituting 20 A320 jets with older engines in place of newer models, according to Douglas Harned, a Bernstein analyst. An Airbus representative said the company would hand over more older-version A320s this year "to make up for any shortfall on A320neo deliveries" but didn't specify the number of planes.
The engine problems "appear significant with path to resolution currently unclear," Harned wrote in a note. Pratt & Whitney declined to discuss its plans to improve production processes.
Delays also forced Bombardier to halve projected 2016 deliveries of its marquee C Series jetliner. The company has a deal to use Pratt & Whitney engines exclusively on the plane.
"This is very disappointing," Alain Bellemare, Bombardier's CEO, said in a speech.
But even after the various issues, Bellemare couldn't muster bad words for the engine's core technology: "I'm still very pleased that we made that choice. It's the best engine available out there today for commercial aircraft."
Business on 10/11/2016