AerCap CEO voices concern over Pratt engine delivery delays

September 7, 2016 8:14 PM EDT

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By Alwyn Scott

(Reuters) - The head of the world's largest independent aircraft leasing company, AerCap Holdings NV (NYSE: AER), voiced concern on Wednesday that a delay in delivery of some Pratt & Whitney engines could ripple out and affect AerCap's ability to receive a new Airbus (NYSE: AIR) jetliner due in the next few days.

The comments followed plane maker Bombardier Inc's announcement on Tuesday that deliveries of its CSeries jet would be reduced this year due to delays in receiving Pratt Geared Turbofan(GTF) engines.

Pratt, a unit of United Technologies Corp (NYSE: UTX), said on Wednesday it has been working with its customers and strengthening its supply chain to address any issues and meet production demands.

AerCap Chief Executive Officer Aengus Kelly said in an interview that the Bombardier announcement had raised concerns about its own delivery schedule for Airbus A320neos, which use a similar Pratt GTF engine.

AerCap has ordered roughly 100 A320neo-family planes equipped with Pratt GTFs along with a similar number powered by a rival engine. AerCap has not ordered the CSeries.

"We've had no notice yet" of a delay in A320 deliveries, Kelly said. "We are monitoring this very closely."

He added: "The onus is on United Technologies to deliver. They need to do whatever it takes to make it happen. This is not the time for penny pinching."

In response to questions from Reuters, Pratt said it is continuing "to evaluate necessary resource requirements for production and deliveries" of its engines.

"To meet what has been incredible demand for the GTF engine, we are working collaboratively across our entire manufacturing process to ensure maximum performance, and we are keeping our customers apprised throughout the process," company spokeswoman Sara Banda said in a statement.

Pratt is in the midst of investing more than $1.3 billion "to transform and modernize its manufacturing footprint to meet demand across our portfolio," Banda said.

"We're seeing results that give us confidence we are on the right track," she added.

(Reporting by Alwyn Scott; Editing by Andrew Hay)



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